State of the Nation's Housing: 2000
JCHS
2000
Joint Center for Housing Studies, Harvard University
JCHS, (2000), "State of the Nation's Housing: 2000", Joint Center for Housing Studies, Harvard University.
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| The Joint Center for Housing Studies is Harvard University's
Executive Summary
Housing markets began the twentyfirst century on a high note. Buoyed by the longest economic expansion in history, home sales, homeownership rates, and the value of residential construction all set new records in 1999. And thanks to strong income growth, housing affordability remained in check for most Americans despite rising interest rates, home prices, and rents. Widespread home price inflation continues to lift household net worth. The stock market boom notwithstanding, home equity remains the cornerstone of household wealth¡ªeven among most American homeowners who also have stock holdings. In the midst of this remarkable prosperity, however, the homeownership gap between whites and minorities has hardly narrowed. Even worse, millions of very low-income households still lack adequate, affordable housing at a time when losses of subsidized units are rising.
Home Building's Resilience Housing markets shrugged off a full percentage-point increase in interest rates in 1999, with no yearover- year decline posted in aggregate production or home sales. Although multifamily and manufactured housing production did retreat, the value of new multi- and single-family construction rose and single-family production stood at its highest level in two decades. Housing starts have shown no significant declines for eight years, making this the longest housing expansion in the last half-century (Figure 1). Aided by steady economic growth, production gains have been more gradual than during the last three expansions. Adjustablerate mortgages have also helped to blunt the impact of rising interest rates, climbing from 12 percent of mortgage loans in 1998 to 21 percent in 1999. With plenty of room for that share to grow, adjustables should again help to stave off a major downturn in housing markets this year. While production did cool in over one-third of the states in 1999, it was still going strong in the rest¡ª most notably in four of the five states that together account for almost 40 percent of the nation's residential construction. Housing could thus eke out further gains in 2000, although rising interest rates and moderating stock prices pose threats to growth. |
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