Echo boomers, the children of baby boomers, will be the salvation of the housing market, Harvard University's Joint Center for Housing Studies predicts. In its annual state of the nation's housing study, the center says that the 75 million Americans born between 1979 and 1995 will mean plenty of demand for housing units.
"There will be 5 million more echo boomers than there were boomers when they first started swelling housing markets," says Eric Belsky, executive director of the Joint Center.
Belsky predicts that once the job market turns around, the housing market will recovery quickly because inventories are close in balance between supply and demand.
But the study warns that while echo boomers will increase demand significantly, they may not drive up prices much because their real incomes are lower than those earned by people a decade older when they entered the job market.
"While fundamentally we see what could be the foundation for long-term recovery, we still have to get through today's challenges," says Nicolas Retsinas, director of the Harvard center.
Sources: CNNMoney.com, Les Christie, and Reuters, Lynn Adler (06/22/2009)