The housing market is stalled, and the reason why is pretty simple: young adults aren’t all that interested in buying houses. It’s not hard to see why. Americans who are currently between 25 and 34 spent their formative years watching housing prices soar, then abruptly collapse, taking the entire global economy with them. Among those Millennials who haven’t already purchased and lost an underwater home…who wants to buy a starter condo after that?
Well, assuming that they can. The unemployment rate among young adults is about equal to that among the population in general, but employment feels precarious and under-employment remains high. Real estate and economy trends expert Joel Kotkin asked BusinessWeek rhetorically, “[W]ill the economy be so crappy that the Millennials will never be able to afford a house?”
He’s not the only one wondering. A few months ago, Yale economics professor Robert Shiller predicted a few months ago that the housing market may not pick up for at least a generation. Everyone needs a home, but it makes more sense to rent when you wonder whether you’ll be jobless and moving back in with your parents in a year’s time.
‘Lost Generation’ of Homeowners May Just Be on Hold [Bloomberg BusinessWeek]
Maybe no housing rebound for a generation: Shiller [Reuters]