Missing home buyers
Date posted: December 3, 2013
Although the housing market has been recovering from the recession, some analysts say something is still lacking — buyers, particularly young buyers. N.C. State University economist Mike Walden discusses the issue.
“If you look at the numbers, the percent of households in the country who are homeowners is today at a 13-year low. Now part of that is the recession. And we are coming out of the recession. We are seeing homebuying increase, but another factor is that it looks like we have a whole group of what we call missing home buyers, particularly young adults. Young adults today are not buying homes at the rate they used to be.
“Now, several factors behind that: Certainly, again, a weak job market. It’s somewhat harder to obtain loans. Many of those young homebuyers — or young households, I should say — are living with parents. And many of them right now don’t see an advantage of owning a place over renting.
“Now recognizing this, a very interesting trend is taking place right now in the home-building market. Many developers are building single-family homes, which would always (in the past) be sold as owner-occupied. But they’re building single-family homes specifically as rental units, and they are trying to attract those young adults — who really don’t care to be a homeowner — … to be renters.”
“Now if we do see homebuying among young adults pick up, that is going to be a big big boost for the homebuying market.”
Category: Economic Perspective