Young and Old Homeowners May Look to Small Homes, Harvard Reports

Harvard University’s 2011 edition of the State of the Nation’s Housing predicts small homes to be the focus of younger and older tenants in the next decade.

According to the report out of Harvard’s Joint Centre for Housing Studies, rentals will continue to increase in price, which could encourage younger tenants to take advantage of the affordable, small home prices.

Eric S. Belsky, managing editor of the JCHS said decreased home prices and interest rates have made property ownership affordable, but high unemployment and stringent lending standards are restricting young tenants from buying.

While most baby boomers are still expected to age at home, the JCHS also predicts this aging tenant population will look to small home ownerships as they downsize from their current homes. The report anticipates that this demographic will have a large impact on the housing market, particularly retirement destinations and assisted or independent living facilities, due to its large population.

In the report, however, the public’s lack of confidence in the current housing market was clear as the national homeowner rate in 2010 fell below 67 percent, and is expected to keep falling. This decline in household growth and demand creates a critical hindrance to the housing market’s recovery.

Fannie Mae’s Quarterly Report found that while home prices on a national level declined by 1.8 percent in the first quarter of 2011, one in three Americans expect home prices to strengthen within the upcoming year.  

More News