First Time Home Buyers Down 35%, Probably Because Almost 35% Of Them Are Unemployed!

Posted: June 21, 2011 in News, Opinion
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Great article on how the housing market has been in a steady decline since 2006 even with two bail out plans.  One of the worst sectors is with first time home buyers.  This is normally a larger portion of used home sales because they graduate from college and get good jobs and then want to own a place of their own.  Well at least it used to work that way.  Now almost 40% of college grads cannot find full time work.  Most are working part time or for far less than they thought they would make when they entered the “Real World”.  Also the numbers of how many are truly unemployed are way lower than what actually get reported.  This happens because many of then are not eligible for unemployment because they have never held a full time or for some even a part time paid position.  So what we are really looking at is that 40% of college grads who worked through college are still under employed, the actual number is most likely much higher, it could be as high as 60%.  Until our young intelligent work force gets proper employment and wages, the housing market and our economy will never rebound.  The worst part is this is cutting into when these young adults would be saving the most money, which could cause draw backs for year to come, basically putting the new college grads behind 5-10 years on their life schedule. If that trend continues we will be lucky if Social security and other social benefits programs can remain funded through this decade.

Quotes from the article –> Home sales fall to 2011 low; few 1st-time buyers

One sign of the housing industry’s struggles is that fewer first-time buyers are entering the market. The number of first-timers ticked down to 35 percent of sales last month. In healthy times, they drive about half of sales.

First-time buyers are critical because they tend to improve their properties and invest in their communities, a combination that raises home values. And their purchases allow sellers to move up to pricier homes.

Bigger required down payments, tougher lending rules, heavy credit-card and student-loan debt and a shortage of desirable starter homes are keeping many would-be buyers away. Even some who do have enough money for a down payment and a solid credit history are holding off, worried that home prices will keep falling.

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