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Soft housing demand imperils recovery

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Demographic terms bode well for the long-term health of housing markets, but the near term is fraught with uncertainty, according to a "State of the Nation's Housing" report released today by the Joint Center for Housing Studies of Harvard University. With the economy finally adding jobs this spring and house prices down dramatically, "two essential conditions for a sustained recovery in single-family starts and sales had fallen into place," the report said. But it remains to be seen whether home sales will weather the expiration of the federal homebuyer tax credit, the report said. Initial signs of a recovery are also threatened by a "severe overhang" of vacant units, high unemployment, and record numbers of homes that are worth less than what's owed on their mortgage. The report concludes that deep cuts in homebuilding have already brought housing supply and demand back into better balance. It's soft demand for housing, rather than a large oversup...