IMPEACH BUSH

NEW YORK — A bottom to the housing slump is nowhere in sight and, if history is any guide, a recession is most likely lurking around the corner, an academic study showed Monday.

Harvard University's Joint Center for Housing Studies painted a bleak picture of the housing downturn, pegging it as possibly being "the worst in a generation" in its "The State of the Nation's Housing 2008" report.

The study noted that housing starts, new-home sales and existing-home sales are at all-time lows since after World War II, while price declines and mortgage defaults are the worst on record.

"We've never had so much information or data in uncharted water," said Eric Belsky, the Joint Center's executive director. "A recovery is not anywhere near in sight."

A recession followed six of the last seven housing downturns, he noted, usually within two years. After the recession ended, housing starts typically rebounded strongly once inventory fell and new-home sales picked up.

"The slump in housing markets has not yet run its full course," said Nicolas Retsinas, the center's director.

"Mortgage rates have barely responded to the aggressive easing of the Federal Reserve, the supply of for-sale vacant units continues to grow and much tighter underwriting is locking many would-be homebuyers out of the market."

The number of consumers paying more than half their income for housing rose to 8.8 million in 2006 from 6.5 million in 2001, according to the report.

Surging foreclosures will keep putting pressure on home prices as the number of repossessions rose to 1.3 million in 2007 from about 660,000 in 2005, the study said.

With the credit markets "in such disarray," the for-sale housing market at record levels and "only small declines" in mortgage rates, "emerging from today's housing slump could take some time," according to the center's report.

"If the economy slips into a severe recession, the prolonged contraction could drive down the sustainable level of housing demand by slowing the loss of older units, forcing more households to double up and reducing sales of second homes," the report said.

The number of new, unsold single-family homes rose to more than an 11 months' supply in late 2007 and early this year, the highest level since the late 1970s.

The number of existing single-family homes for sale surged to a 10.7 months' supply by April of this year, according to the report.

Real home equity fell 6.5 percent to $9.6 trillion in 2007, and the switch to depreciation from appreciation, along with the slowdown in home-equity withdrawals, reduced real consumer spending about half a percentage point and total economic growth by more than a third of a percentage point, the Joint Center said.

"The dramatic drop in prices has also sidelined more buyers than in the past, and foreclosure rates are the highest they have been since record-keeping began in 1974," the center said.

"All of these factors may make this downturn more protracted than usual, and credit market woes may slow the eventual rebound."

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