Housing's Grim Outlook

Harvard's Joint Center for Housing Studies released its annual State of the Nation's Housing Report on Monday, and the outlook was pretty grim. The bottom line is that we won't see a full turnaround in housing until we see robust jobs growth.

Home values have declined by an estimated 30 percent since 2006, according to the study, but if anything, that understates the problem. Because most of the houses in the U.S. were bought at what are now inflated prices - and because incomes have stalled out instead of growing - millions of American households are now devoting half their income to their mortgages. More than 11 million homeowners are underwater on those mortgages, so they can't even sell them and move into more affordable housing. Two million mortgages are in foreclosure, quadruple the amount from four years ago.

Is there any good news in all of this? The Harvard researchers do foresee something that could end the housing slump: They think a leap upward in those jobs numbers could have a huge impact on the housing market. With all the pent-up demand from people who basically haven't been able to move over the past five years, a bit of a jump-start from the employment numbers could have a big ripple effect.