Middle-class housing crunch
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MARK AUSTIN THOMAS: The U.S. apartment market remained strong in the first quarter, however most areas of the country didn’t show an impact from the recent mortgage crisis. The real estate analysis group Reis says nationwide rents rose an average 1 percent. Vacancy rates remained about the same. The study found that in some markets rental rates were restrained because condominiums were reconverted to apartments and then returned to the market as rentals.
Meanwhile, today the House Financial Services Committee will hold a hearing in Massachusetts about the middle-class housing crunch. Marketplace’s Steve Henn reports that high housing prices aren’t just a drag for first-time buyers they’re also a drag on some regional economies.
STEVE HENN: Many economists are preoccupied with whether or not the housing bubble has burst.
Barry Bluestone is at Northeastern University. He’ll testify that in places like Boston a sustained housing boom could have a bigger downside.
BARRY BLUESTONE: Controlling for inflation, median household income in greater Boston has essentially been flat for more than 15 years. At the same time, median home prices have risen by about 50 percent.
That’s put the entire region out of reach for most first-time buyers.
In another study, Bluestone found that cities with the highest median housing prices have real economic problems.
BLUESTONE: The cost of living has finally caught up with those communities. They have been losing jobs, they have been losing population.
Turns out high housing costs are a quiet job killer, so slowly deflating the bubble might not be such a bad thing.
In Washington, I’m Steve Henn for Marketplace.
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