We have all heard about the “pent up demand” for housing. What exactly is that? Quite simply, it is the younger generation that have not been able to enter the workforce because 14.9% unemployment rate and underemployment. It is possible when we get through this “recession” or “recovery” we could see a shortage of housing relatively quickly. It will likely start with the “starter home” price ranges, which then starts a domino effect up the price ranges. The housing market is basically stuck until this age group gets steady employment. To which I might say “Get a Job!”, like an old codger… They are in a tough spot, as we all are.
Back to Jobs, Jobs, Jobs.
For most young adults, the only jobs market they know is the one shaped by the Great Recession. Unemployment for 20- to 24-year-olds is about 14.9 percent, still well above the national average of 9.1 percent. That doesn’t allow young workers to think much about the job they want, just the job they can get. And if they live on their own, it’s often with roommates.
The economic impact extends well beyond mom and dad’s wallet. With young adults struggling to live independently, household spending is diminished as fewer new households are being created. As a result, less need exists for furniture, appliances and a variety of services.
“Job formation helps determine household formation,” said Maury Harris, chief U.S. economist for UBS Securities.
From March 2009 to March 2010, the number of new households in the United States was the lowest on record. The plight of younger workers played a large part in the downturn of households, as families were forced to consolidate.
- The Twin Cities losing Population and the impact on the housing market. (craigkamman.wordpress.com)
- Hennepin County & Minneapolis/St. Paul, Minnesota Unemployment Rates August 31 2011 (craigkamman.wordpress.com)