Obama economy devastates young and housing markets, Under 35 home ownership plummets from 43.6 percent to 36.2, Unemployment rate 9.1 to 15.5 percent for 18 to 29 year olds, Student loan debt
“11.4%: What the U.S. unemployment rate would be if labor force participation were back to January 2008 levels.” …James Pethokoukis, American Enterprise Institute, June 2013
“Over the last six months, of the net job creation, 97 percent of that is part-time work,”…Keith Hall, former BLS chief
“Nearly half of U.S. companies are reluctant to hire full-time employees because of the ACA. One in five firms indicates they are likely to hire fewer employees, and another one in 10 may lay off current employees in response to the law.
Other firms will shift toward part-time workers. More than 40 percent of CFOs say their companies will consider switching some jobs to less than 30 hours per week or targeting part-time workers for future employment.”…Duke University Fuqua School of Business December 11, 2013
Citizen Wells recently presented the impact on blacks of the Obama economy.
Another demographic that supported Obama, young people, has also been devastated by the Obama economy and the subsequent impact on the housing market has affected everyone.
From Market Watch May 13, 2014.
“There was an 8% drop in existing home sales in Greensboro-High Point, N.C., after a 2% rise in the fourth quarter, RealtyTrac found. “There’s still a lot of uncertainty about the economy,” says Tommy Camp, president and CEO of Berkshire Hathaway HomeServices Yost & Little Realty. “Some buyers say, ‘We’ve got a job, but we don’t know how secure that is.’” A slowdown in household formation has also had a negative impact on the housing market, he says; 18- to 34-year-olds account for more than half of missing households — that is, Americans who would be owning or renting a home now if prerecession economic trends had continued.”
From Market Watch May 12, 2014.
“For now, the absence of young adults from the housing market continues to put a dent in the homeownership rate, which dropped to 64.8% in the first quarter, compared with 65.2% in the fourth quarter of 2013, according to U.S. Census statistics. The rate was as high as 69.2% in the fourth quarter of 2004. For those younger than 35, the rate has fallen noticeably faster. It slipped to 36.2% in the first quarter, from 36.8% in the fourth. The homeownership rate for this group was as high as 43.6% in the second quarter of 2004.
“The [25 to 35] age cohort…probably has had the hardest time recovering from the Great Recession,” said Rick Sharga, executive vice president of Auction.com, an online real estate marketplace. “For the time being, we’re likely to see a higher percentage of households formed being rental households,” and overall homeownership rates are likely to continue to drop somewhat—perhaps even down to 62%—before bottoming out and climbing back up, he added.
While some industry watchers have suggested a shift in attitudes away from Homeownership, Sharga and others say it’s too soon to know whether people truly have a waning interest in owning homes. But one thing’s for sure: Young people have plenty of hurdles to becoming homeowners.”
“The unemployment rate for 18-to-29-year-olds was 9.1% in April, which rises to 15.5% if you include those who have given up looking for work, according to Generation Opportunity, a national, nonpartisan youth advocacy organization. The unemployment rate was 6.3% in April for all ages.
Forget that without a job it’s just about impossible to get a mortgage. (It’s also hard to rent: Twenty-nine percent of adults younger than 35 live with their parents, according to Gallup poll results released earlier this year.) A slow start to earnings also means a slow start to saving.
“The majority of younger renters report having insufficient assets to cover a 5% down payment plus closing costs on a typical starter home,” Shahdad wrote.”
“In 2012, 1.3 million students who graduated from four-year colleges (or 71%) had student loan debt, up from 1.1 million in 2008 and 900,000 in 2004, according to the Institute for College Access & Success, a nonprofit independent research and policy organization. Graduating seniors with student loans had average debt levels of $29,400 in 2012, up 25% from $23,450 in 2008.
And new mortgage regulations, set into motion by the Dodd-Frank Act, require that borrowers have no more than a 43% debt-to-income ratio (with debt encompassing monthly housing costs and debt payments, including those on student loans). That ceiling may also restrict first-time buyers, some say.”