While there is growth in the housing market, many real estate professionals have noticed something missing – first-time home buyers. The slow pace of the job market has made young adults, who make up the bulk of the first-time home buyer market, stay comfortable with living with their parents. Nearly 3 million more young adults are staying put compared to 2007.
Of course, this goes back to pent-up demand – it’s not that buyers in their 20s don’t want to move out, but according to Eric Belsky, managing director of Harvard’s Joint Center of Housing Studies, “… their incomes just aren’t high enough to make it work.” In his statement to NPR, Belsky continues, “you have a very stressed group in their 20s.”
New rules on mortgages designed to keep out lower income and weaker credit rating buyers are also keeping out younger buyers who have not had as much time to build up credit and down payment savings. It’s hard to come up with 10 to 20 percent when the employment rate among Americans aged 20 to 24 slipped to just 61 percent in 2011. This hunger for a job can also make young professionals wait to set down roots for fear of losing their current job or finding an opportunity in another city or state.
Employment may also be a big reason why we are seeing a rise in the average age of young adults who have settled down. The median age for men to marry is now nearly 29, compared with age 25 just three decades ago. Women typically get married at nearly 27 years old today, compared with 23 years old in the early 1980s. That delay to start a family means there’s a delay in the pressure to settle down and buy a home, too.
There are plenty more factors involved in keeping young buyers from seeking their first home in Chicago. If you know of more, let us know in the comments!