The State of the Nation's Housing Reviewed

When will the housing bust reach bottom? How far down will the prices fall? Will we have any equity left when all this happens? Good questions that even our best and our brightest at Harvard are pondering. TIME Magazine brings us a good synopsis of Harvard University's Joint Center for Housing Studies The State of the Nation's Housing 2009. The entire paper is 44 pages, so far all we have read is this abbreviated version. So let's take a look - .

Highlight Reel:

• On the danger of using home equity to pay off non-home debt: "A recent Federal Reserve report estimates that of the trillions of dollars in real home equity cashed out between 2001 and 2007, homeowners used $874 billion to pay off non-mortgage debt—in effect rolling consumer debt into their home loans. Unlike consumer debt, mortgage debt cannot be discharged through personal bankruptcy."

• On the generation that could help: "[T]he echo-boom generation is replacing the far smaller baby-bust generation in the young-adult age group. Indeed, the echo boomers are entering their peak household formation years of 25-44 with more than 5 million more members than the baby boomers had in the 1970s. The echo boomers will help keep demand strong for the next 10 years and beyond, bolstering the markets for rentals and starter homes."

• On how housing challenges affect the overall economy: "[H]ome equity fell by $2.5 trillion in real terms in 2008 and nearly $5.9 trillion (or 43 percent) from the 2005 level. The loss of housing wealth caused consumers to curtail cash-out refinances and pull back on spending, knocking an additional 0.9 percentage point off economic growth last year, according to Moody's Economy.com."

• On why incomes are looking paltry: "Real median household incomes in all age groups under 55 have not increased since 2000. In fact, for the first time in at least 40 years, there is a chance that the real median household income for these age groups will be lower at the end of the decade than at the start."

The Lowdown:

If the numbers and news about home prices, unemployment, foreclosures and the sub-prime mortgage crisis have blurred your vision and made your ears bleed over the past year, this report will help boil it all down to what's essential — and it'll also throw in some graphic elements if you're more of a visual learner. But don't expect any groundbreaking information. Since the center is research-based, much of what it has published in the "State of the Nation's Housing" has been reported or analyzed before. The report does, however, offer some interesting insights into how the so-called "echo-boomer" generation could play a vital role in boosting the housing market. But like many economy- and housing-related projections, these figures are just forecasts. If anyone really knew when the housing market will bottom out or reach its peak, there would be no reason to speculate.

Will the echo boom save the housing crisis and bring us back to prosperity? If not, who or what will? This is actually an annual report. Here is a link to the full report. We will take a look and if there is anything substantial we will report back.