Harvard University’s State of the Nation’s Housing 2009 report stated that the offspring of baby boomers will play a significant role in the recovery of the country’s housing market which is currently being pummeled with bank owned foreclosures.

According to the report, limits on credit and income are the factors that sustain the already three-year crisis. It also noted that the emerging progress in home sales made possible with the help of the Obama Administration is being derailed by increasing unemployment rate, bank owned foreclosures and strict lending process.

Echo boomers, who are the children of baby boomers of the post-World War II generation, may offer a big source of support for the housing market, according to the report. It explained that echo boomers are on renting ages between 25 and 44 and are entering the height of home buying.

The report said that echo boomers totaled more than five million compared with the number of their parents’ population.

Harvard’s director of Joint Center for Housing Studies Nicholas Retsinas said that with echo boomers’ big population and immigration, the stage is set for a possible housing recovery.

The report said that echo boomers will boost demand for the coming years, thus reducing bank owned foreclosures and stabilizing the housing market.

However, Retsinas pointed out that there are myriad of challenges that have to be faced and overcome before housing market stability could be achieved, adding that there is a need to stabilize the housing finance in the country.

Industry experts said that a healthy and stable housing market is a very important ingredient of the growing economy.

The collapse of the housing market has pressured the economy to remain in a longest recession ever, causing the lost of thousands of jobs which derailed the housing recovery.

Retsinas said that the housing recovery should come from the solutions that would be provided for foreclosures and job losses.

Meanwhile, mortgage interest rates continue to increase despite a federal effort to keep them low. The number of bank owned foreclosures also rose despite government efforts to help distressed homeowners remain in their properties.

It seems that foreclosures could not keep up with the growth of loan failures due to drastic drop of home prices and increasing job losses.