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Housing slumps, but homes still pricey

Steve Tripoli Jun 11, 2007
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Housing slumps, but homes still pricey

Steve Tripoli Jun 11, 2007
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SCOTT JAGOW: A closely-watched annual report on the housing market comes out today. We’re not expecting much that’s new — the housing market’s in a rut, we know that. But for many people, that’s not making homes any more affordable. Steve Tripoli has more.


STEVE TRIPOLI: Despite a sales slump, 2.3 million additional U.S. households joined a category of those with high housing costs in 2006. Nicholas Retsinas of the Joint Center for Housing Studies at Harvard led the research.

NICHOLAS RETSINAS: It is a very significant bump. We’re still seeing that disconnect between wages and housing prices.

Retsinas says stagnating wages, a growing number of house-hungry families and regional supply constraints keep prices out of reach for many. He says the affordability challenge could have ripple effects.

RETSINAS: It could also undermine economic competitiveness for a region.

That’s because high housing costs drive workers to demand higher wages.

RETSINAS: And particularly in a global economy, that can make certain businesses, certain sectors, uncompetitive.

Despite all this, the report predicts that growing immigration and high-end household wealth will keep spending on housing robust through the next eight years — but only after the oversupply from the building boom clears up.

I’m Steve Tripoli for Marketplace.

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