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decade after the onset of the Great Recession, the national housing market has, by many measures, returned to nor- mal, according to the latest State of the Nation's Housing report, released by the Joint Center for Housing Studies of Harvard University. Housing demand, home prices and construction volumes are all on the rise, and the number of distressed homeowners has fallen sharply. However, along with strengthening demand, extremely tight supplies of both for-sale and for-rent homes are pushing up housing costs and adding to ongoing concerns about affordability. At last count in 2015, the report notes, nearly 19 million U.S. households paid more than half of their incomes for housing. NATIONAL HOME prices hit an important milestone in 2016, fi- nally surpassing the prerecession peak. Drawing on newly available metro-level data, the Harvard researchers found that nominal prices in real prices were up last year in 97 of the nation's 100 largest metro- politan areas. At the same time, though, the longer-term gains varied widely across the country, with some markets experiencing home price appreciation of more than 50 percent since 2000, while others posted only modest gains or even declines. ese differences have added to the already substantial gap between home prices in the nation's most and least expensive housing markets. "While the recovery in home prices reflects a welcome pickup in demand, it is also being driven by very tight supply," says Chris Herbert, the Center's managing director. Even after seven straight years of construction growth, the U.S. added less new housing over the last decade than in any other 10-year period going back to at least the 1970s. e rebound in single-family construction has been particularly weak. According to Herbert, "Any excess housing that may have been built during the boom years has been absorbed, and a stronger supply response is going to be needed to keep pace with demand—particularly for moderately priced homes." Meanwhile, the national homeownership rate appears to be leveling off. Last year's growth in homeowners was the largest increase since 2006, and early indications are that homebuying activity continued to gain traction in 2017. "Although the homeownership rate did edge down again in 2016, the decline was the smallest in years. We may be finding the bottom," says Daniel McCue, a senior research associate at the Center. Affordability is, of course, key. e report finds that, on average, 45 percent of renters in the nation's metro areas could afford the monthly payments on a median-priced home in their market area. But in sev- eral high-cost metros of the Pacific Coast, Florida, and the Northeast, that share is under 25 percent. Among other factors, the future of U.S. homeownership de- pends on broadening the access to mortgage financing, which remains restricted primarily to those with pristine credit. LOOKING AT the decade ahead, the report notes that as the members of the millennial generation move into their late 20s and early 30s, the demand for both rental housing and en- try-level homeownership is set to soar. e most racially and ethnically diverse generation in the nation's history, these young households will propel demand for a broad range of housing in cities, suburbs and beyond. e baby boom generation will also continue to play a strong role in housing markets, driving up investment in both existing and new homes to meet their changing needs as they age. "Meeting this grow- ing and diverse demand will require concerted efforts by the public, private, and nonprofit sectors to expand the range of housing options available," McCue says. Growing Demand, Tight Supply Raise Home Prices and Rents By Harvard Joint Center for Housing Studies STATE OF THE INDUSTRY A NEWS Consumers optimistic about current conditions but mixed on near term The NAHB reports that its Consumer Confidence Index, released by the Conference Board, indicates consumers are feeling opti- mistic about current conditions in June, but less optimistic about the near term outlook than in May. Consumers' assessments of current business conditions strengthened as did their optimism about current employment conditions. Expectations of business conditions over the next six months were mixed as were expectations of employment conditions in the same time period. The Conference Board also report- ed the share of respondents planning to buy a home within six months—5.9 percent of respondents said they plan to buy a house in June, compared to 6.1 percent in May. Despite the monthly volatility, the trend in the share of respondents planning to buy a home within six months has been climbing. 10 July 2017 QR QualifiedRemodeler.com IN BRIEF