Over on the Wall Street Journal’s real estate blog, there’s a good summary of research on housing’s ‘new normal’ from John McIlwain of the Urban Land Institute. McIlwain predicts that:
- Home prices will fall an additional 10% this year
- Foreclosures and underwater mortgages will increase and could hit 21 million by year-end
- Home appreciation will slow to 1% or 2% annually in the coming decade, and the home ownership rate of 67% could drop to 62%
All of this means that “more people will stick with renting – whether by choice or necessity. Mr. McIllwain says that housing in and around major cities will remain unaffordable for many who work there. (We’ve previously reported that some 42% of those who once purchased, but don’t currently own, do not think they’ll own again.)”
