The present down market isn’t going away. It’s going to get worse. Housing markets typically take years to recover, and this one is no exception. Home sales in 1993 were at about the same level as they were in 1988, and there wasn’t a consistent increase until 1995.

Even when the market stabilizes and recovery begins, the market won’t see a quick rise in prices or units sold, absent significant immigration. Aging baby boomers won’t be buying as many houses as before. The risk inherent to home-buying, eliminated by cheap mortgage money, has returned, along with a crisis in confidence. These factors will aid in a return to the acceptability of renting, which also permits job mobility and fast lifestyle change. Homeownership will be largely confined to upper-income people and to those in professions offering geographical stability and de facto tenure.

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