Low Employment Rates Among Young Adults Stunts Housing Recovery
Young adult employment has been added to recent studies on the housing recovery because this demographic is “a key age group for household formation and first-time homeownership,” according to the latest Trulia Housing Barometer.
The housing market overall has shown signs of promise, but employment among young adults has remained slow moving. Adults 25-34 have become one of the top five market indicators in the recently re-launched barometer, joined by home prices, home sales, delinquencies and foreclosures and construction starts.
“The housing market cannot fully recover until young adults get back to work,” says Jed Kolko, a chief economist at Trulia. The employment rate for young adults 25 to 34 is at 74.9%, which is only 23% of the way back to its normal rate of 79.3 percent.
On the bright side, construction permits are on the rise, which means that there will likely be a future pickup in housing starts. Home prices took the biggest win, receiving “most improved” in Trulia’s Housing Barometer.
Both San Jose and San Francisco land in Trulia’s Top 10 markets that are all the way back to normal, meaning prices are less than 2% undervalued and permits are less than 10% below normal.
These markets also see the highest rates of employed young professionals. Let’s hope that we see in uptick in hiring in 2014.