While the housing recovery seen during the past year or more has brought millions of homeowners back to positive standing with their mortgages, there is still a sizable portion of the population that may be having significant difficulties coping with market conditions.
Rising prices, growing demand and stabilizing construction rates have made the national real estate market improve by leaps and bounds in recent months, but many still spend too much on their housing costs, and millions remain delinquent on their mortgages, according to the latest State of the Nation’s Housing report from the Joint Center for Housing Studies of Harvard University. National homeownership rates have been declining for eight straight years and among those between the ages of 25 and 54 years old, they now stand at the lowest levels seen since 1976, when this annual study began.
“With rising home prices helping to revive household balance sheets and expanding residential construction adding to job growth, the housing sector is finally providing a much-needed boost to the economy,” said Eric Belsky, managing director of the Joint Center for Housing Studies. “But long-term vacancies are at elevated levels in a number of places, millions of owners are still struggling to make their mortgage payments, and credit conditions for homebuyers remain extremely tight. It will take time for these problems to subside.”
He added that affordable housing remains difficult to obtain for many individuals and families, and 20.6 million households nationwide were still paying more than half of their incomes for their living arrangements through the end of 2011, the report said.
Another 21 million or so are paying more than 30 percent of income. That comes to a total of 37 percent of all households nationwide paying what is generally considered to be too much for their housing. Further, between 2001 and 2011, the number of people paying more than half rose 49 percent, and about two in five of those people actually saw those costs go up since the beginning of the recession.
Current homeowners who are hoping to find some relief on their mortgage payment costs may want to consider refinancing in the near future while rates are still lower than historical norms. It’s expected that these could rise significantly at some point in the near future once the Federal Reserve Board begins to curtail its bond-buying efforts.