What natural variables drive demand and the cost for real estate?

The solution: first time home buyers, trade buyers and downsizing families up.

The first group (first time home buyers) is being impacted by present economic conditions. The marks of a healthy property marketplace is defined by a powerful pool of first time home buyers.

We can just do so much as investors to fill this emptiness.

To put it differently, it doesn’t seem we’ve an all-natural, natural restoration of the home marketplace.

No matter many local investors there are restoring houses in local communities, or how many hedge funds are buying distressed assets off the books, it all comes back to basics of the marketplace, specifically first time home buyers.

This group, for apparent reasons, tends to be a younger demographic, so we’ll discuss problems that pertain to them.

The purpose of this post will be to set to light concerns backed up by the difficulties and factual sources the home restoration will face moving forward.

After all, I doubt 50% of all real estate transactions.

Home Ownership Rates:

Based on a fresh study home ownership rates have dropped to the lowest level in 19 years and the data is continuing its downward tendency.

Keep this advice in mind as we discuss the underlying reasons for this in more depth below.

1. Homeownership rates

The Predicament of the Youthful, Future First Time Home Buyers:

Underemployment, joblessness and depressed wages are resulting in tight credit and creating a serious challenge for prospective new homeowners manage a mortgage and to save up for a down payment.

As a realtor I find this first hand everyday’s impact with prospective customers.

Debt burden is still a problem too. Assuming one can locate gainful employment after school, the price of higher education is growing at the rate of inflation and continuing to grow (in a literal data sense).

Consequently, the first-time home buyers demographic is bearing a high debt burden. Some are making school with a loan before having a mortgage that essentially amounts to a mortgage.

Rather than purchasing, present economic conditions favor renting for many. It’s no coincidence that lease rates are high the aforementioned variables and tight inventory are making it hard for first-time home buyers to actually purchase.

2. The Predicament of the Youth future first time home buyers

Connected: Do not Shout for Related: -Time Homebuyers

Employment:

Assuming one can see gainful employment wage increase has been stagnant along with job increase.

Reports now demonstrate the unemployment rate is dropping; yet, this is really due to joblessness is computed. It results in the reported monthly unemployment rate, as more Americans make the work force and labour contribution rate drops.

In effect, it’s creating a false positive. It’s possible for you to see this represented in the labour contribution rate being at an all time low.

If you dissect the monthly job reports even farther, you’ll discover that both full time and part-time places are being created in the hospitality industry (pubs and eateries).

Labor force participation is at a historical low for the young in particular. Please refer to the graph

3. Employment

Quantitative Easing and the Federal Reserve:

The Federal Reserve Quantitative Easing (QE) plan prints tens of billions of dollars monthly in an effort to buy mortgage backed securities and treasury bonds.

The only purpose of doing so would be to artificially control and lower interest rates in hopes to spur the market.

It’s already becoming hard for would be first time home buyers to buy a house, what’s going to occur if the Federal Reserve cuts it, or starts to taper of their QE policy?

The response: higher rates of interest.

Interest rates continue to be quite low even and right now so it’s doing hardly any to motivate first time home buyers to purchase.

QE artificially lowering interest rates attempting to entice buyers with low rates and is artificially propping up the housing industry, but they begin to taper or finish the plan rates increase.

Again the principles aren’t sensible.

For housing to have an actual sustainable restoration we must have a demographic that is powerful amongst first time home buyers!

Connected: Attempting to choose the best Loan? Quit Looking at Only The Rates!

In Conclusion

The issues seen amongst first time home buyers appear to be dripping its way all the way to the top.

Actually giving has dropped to a 17 year.

Please comprehend the intent of this place wasn’t to be negative or anything of that nature, but rather to touch on our entire economy moving and some of the issues confronting the home marketplace.

It irritates me when I turn on the news and talking heads constantly repeat the exact same wrong facts about what’s happening in the home marketplace, in effect rather than reporting the facts being nothing more than cheer leaders for home.

There’s no dearth in want for American families to own a house; yet, is a dearth of the skill to do that.

Simply because costs are rising doesn’t suggest we’ve an organic, sustainable and natural restoration on our hands.