Stablizing maybe, but at the rock bottom of the market

A new report out today from Harvard researchers takes a look at the state of housing market.

And the study by the Joint Center for Housing Studies offers a reality check of sorts.

Sure, there are signs housing starts and sales are starting to stabilize.

But housing prices continue to decline and foreclosures are still on the rise in most areas.

If the market is hitting bottom, it is stabilizing at extremely low levels that will make the climb up all that more difficult, the report finds.

Moreover, rising interest rates and an economy that is shedding, not adding jobs, loom as threats to any budding housing market recovery.

And despite the falling prices, housing affordability still is a major problem for 18 million Americans who shell out more than half their income on rents or mortgage payments, the report finds.

“Although there are some signs of improvement or at least steadiness in new construction and sales,” says Nicolas P. Retsinas, Director of the Joint Center, “housing starts stand near 60+ year lows and any life in home sales is coming from distressed foreclosure sales, temporary first-time buyer tax credits, and low interest rates that moved higher in recent weeks.”

While short-term the housing picture is stil fairly gloomy, long-term there are grounds for more optimism.

A huge pool of potential home buyers – the so-called echo baby boom – will be coming of age over the next generation. It’s the largest generation in American history and could refuel demand for housing of all types, the Harvard study finds.

I guess the message is we all have to hang in there until Junior is old enough to buy a house.