Here's this week's eWeekly Economic Update with a focus on Generational Trends in Real Estate.
Last Friday’s Employment Situation report for February was a standout. There were an estimated 313,000 new jobs created during the month, 80,000 above the highest prediction made by analysts in Econoday’s survey. The two previous months’ estimates were revised by a net of 54,000 additional jobs.
In was construction jobs however that sent our hearts aflutter. That sector had its strongest growth since March 2007, adding 61,000 jobs. This put job creation in the industry up by 254,000 jobs year-over-year.
Lack of labor has been cited by builders as one reasons for the lag in new home construction. This, in turn, has contributed to tight inventories of available homes and rapidly rising home prices.
Speaking of Prices
It appears that the Millennial generation is still having a tough time moving out of their parents’ basements. The National Association of Realtors (NAR) just published its annual study, Home Buyer and Seller Generational Trends, and found that Millennials, Americans aged 37 and younger, are now the largest cohort of homebuyers, accounting for more than a third (36%) of purchase transactions last year. Still, many are confronting a lot of headwinds as they move toward homeownership and home prices are chief among them.
The household income needed by a first-time buyer to buy the same 1,800 square foot home has increased to $88,200 compared to $82,000 in the 2017 study. NAR Chief Economist Lawrence Yun said its survey also found that members of that generations were confronting even larger levels of student debt. More of them said saving for a down payment was the most difficult part of buying a home.
It was striking that younger baby boomers, those aged 51 to 61, were the most generation to buy a multi-generational home. Of those that had done so, 39% said it was to provide accommodations for their adult children, way ahead of the 22% who did it for parents. Even some Gen Xers were buying such properties to make room for their children who had, at least so far, “failed to launch.
Yun said, “Even in situations where three generations are all cramped under the same roof, it can significantly help some millennials eventually transition straight to homeownership. Eighteen percent of millennial buyers in the survey said their family home was their previous living arrangement.”
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