Job growth will be the key factor in whether the U.S. real estate market can extend a recovery after the end of the federal homebuyer tax credit, according to a Harvard University study. High unemployment is fueling the foreclosure crisis and discouraging the household formation that drives property demand, according to the State of the Nation's Housing report issued by Harvard's Joint Center for Housing Studies.
The weak labor market resulted in people "doubling up," or sharing residences, rather than buying their own home, the report said.
The U.S. unemployment rate dropped to 9.7 percent last month from 9.9 percent in April, the Labor Department said June 4. For all of 2010, it probably will be 9.6 percent, the highest for any year since 1983, according to the average estimate of 82 economists polled by Bloomberg.
Mounting foreclosures are another headwind for a real estate recovery, according to the Harvard report. There were 2.1 million loans in the foreclosure process in the first quarter, almost quadruple the number from three years ago
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