Categorized | Real Estate

Housing Recovery


Share Button

The future of the housing market is uncertain at best due to the lag in recovery being felt by all in the U.S. Experts are convinced that the housing market is on the rise, as interest rates have started to rise. Many are still not convinced due to the lack of first time buyers purchasing homes due to the economy and overall cost which has in turn stagnated the older generation’s ability to sell or get out from under the burden of their homes. The housing recovery has seemingly turned into anything but a recovery for all involved.

First Time Buyershousing recovery 1

The housing market has become as unstable for first time buyers as the job market has become. Many are distrusting of banks and mortgage companies that are requiring first time buyers put down a minimum of 15 to 20 percent of the homes total value. This higher down payment has cause many would be early first time buyers to hold off on buying property than those in the same age bracket of the previous generation. The rickety job market and uncertainty of long term employment has given a rise to a decrease in home purchasing leading to a 14 year low and an increase in renting. In response to this new trend, even developers are on par to meet the rising demand of apartment construction.

The need for mobility is becoming the theme for first time buyers, whom are more willing to move around and follow jobs from place to place than the previously more established older generation. Those who can afford to purchase either follow one of two routes. The first being that more and more younger buyers are holding off on buying because the incentives of a weak housing market, high property taxes, and steep restrictions by mortgage companies and banks. The second trend for first time buyer who can afford to purchase homes and are buying them, are looking for more newer construction over older homes. The reasons as polled by independent studies have found that younger buyers are looking at newer constructed homes due to the lower costs of repairs and maintenance in comparison to the older homes.

A Weak Economy

If anything can be said about the younger generation, the 18-30s working generation, is that they have learned from the crisis that they’ve witnessed the older generation deal with. Many who are in their early working years have noticed and are reacting to the housing bubble explosion as well as the volatile job market. Unlike the previous generation, the current younger generation is either renting more or living with their parents longer which has become more of financially responsible decision for them. The cost of living is constantly rising and with it also comes the rising cost of homes in the country. This rise in overall costs is skyrocketing out of the control and affordability of the younger generation already plagued by mounting student loan debt. The difference between those currently in their 20’s and 30’s have seen the cost of college rise over 600% than the cost see by their parents.

The standard salary that may have been available to entry level in past years is becoming hard to find as entry level expectations change. More employers are cutting jobs despite reports of increased employment figures. More minimum wage jobs have been added and not the mid range to higher salaries that are needed to help support the housing recovery. Many entry level jobs across the country are calling for 3 to 5 years experience and paying between $35,000 and $50,000 per year with limited health benefits. The weak economy is essentially strangling the younger generation’s ability to move out and purchase homes.

Impacting the Older Generationhousing recovery 2

The impact of the lack of a housing recovery has not only affected those looking to purchase for the first time, but those who are looking to sell their homes. The desire for newer construction has definitely taken a toll on the older generation because of the younger generation that can afford to purchase, tends to overlook more established homes as previously stated. Maintenance costs, updating costs, and over all home values versus perceived home value is al mounting against the older generation. Much of the remaining Baby Boomers and the subsequent generation are struggling to unload their homes unto the younger generation and are feeling the heightening financial burden which has contributed to a lag in the housing recovery. The true cost of this financial interruption cannot be accurately measured this year, but will produce results for next year pending there isn’t an implosion in the housing market driving rates down again.

The housing recovery or seemingly lack thereof, has been and remains a massive issue for all generations an working bodies connected to it. The weakened economy and hard financial lessons learned by all have impacted those looking to enter the housing market and those looking to exit. Only time can tell how much recovery the American home owner will see in the coming months.

 

 

Stay informed about the latest on investment information by getting on our FREE eMail list!

This post was written by:

- who has written 2169 posts on StockRockandRoll.


Contact the author

Comments are closed.


© 2019 MJ Capital, LLC | All rights reserved