Coming of age in today’s economy is tough. New 2010 census data released in September 2011shows a huge impact on younger generations. First, there’s a monstrous jobs problem, and the days of counting on a good job out of college are gone for now. Recent college graduates are getting by on waitressing, bartending and odd jobs. When the market does improve, they’ll have to compete with new graduates.
Some of the jobs the young could occupy are being taken up by those 65 and older who are returning to work or staying in their jobs instead of retiring. About 1 in 6 older people are now in the labor force. That’s the highest level since the 1960s. Employment among young adults 16 to 29 is 55.3% compared to 67.3% in 2000. This is the lowest level since the end of World War II.
Moving for jobs is down as well, with the young opting to stay put. Roughly 5.9 million Americans 25-34 last year lived with their parents, an increase of 25 percent from before the recession. Driven by a record 1 in 5 young men who doubled up in households, men are now nearly twice as likely as women to live with their parents.
Marriages fell to a record low last year of just 51.4% among young adults 18 and over, compared with 57% in 2000. Among young adults 25-34, marriage was at 44.2%, also a new low. Many young adults are essentially postponing adulthood and its responsibilities and costs.
Fixing housing could help, but what to do?
A panel of experts this week stated that fixing the housing market shouldn’t necessarily require a major overhaul. Mark Zandi, Moody’s Chief Economist, says: “I take a great deal of solace in recent numbers. The stability in non-distressed prices is encouraging and suggests an underlying stability in the overall housing market. If you can implement policies that reduce the share of distressed sales of the total market, housing should see a dramatic recovery quickly.”
Zandi states that there are three fundamental problems with the housing sector today:
-Valuation – While housing values are back to normal in comparison to income, they’re still a bit high compared to rents.
-Overbuilding – The market is still burdened from past overbuilding, with another two years or so needed to work through excess inventory.
-Foreclosure – He believes that the share of distressed sales in the entire market will go down over the next two years.
Three incremental fixes are proposed to solve housing problems without major initiatives:
1. Fannie Mae and Freddie Mac should make refinancing easier and help in principal reductions.
2. The state’s attorneys general suit against the banks must get settled so that foreclosures can proceed again at a normal pace to clear out inventory.
3. Credit needs to get back to normal. Only loans of “outstanding quality” are being made now, and more people should be able to get a mortgage with normal credit scores.
Our young people are hoping for more employment opportunity, and some of that will come with an improved housing market.
Coming of age in today’s economy is tough. New 2010 census data released in September 2011shows a huge impact on younger generations. First, there’s a monstrous jobs problem, and the days of counting on a good job out of college are gone for now. Recent college graduates are getting by on waitressing, bartending and odd jobs. When the market does improve, they’ll have to compete with new graduates.
Some of the jobs the young could occupy are being taken up by those 65 and older who are returning to work or staying in their jobs instead of retiring. About 1 in 6 older people are now in the labor force. That’s the highest level since the 1960s. Employment among young adults 16 to 29 is 55.3% compared to 67.3% in 2000. This is the lowest level since the end of World War II.
Moving for jobs is down as well, with the young opting to stay put. Roughly 5.9 million Americans 25-34 last year lived with their parents, an increase of 25 percent from before the recession. Driven by a record 1 in 5 young men who doubled up in households, men are now nearly twice as likely as women to live with their parents.
Marriages fell to a record low last year of just 51.4% among young adults 18 and over, compared with 57% in 2000. Among young adults 25-34, marriage was at 44.2%, also a new low. Many young adults are essentially postponing adulthood and its responsibilities and costs.
Fixing housing could help, but what to do?
A panel of experts this week stated that fixing the housing market shouldn’t necessarily require a major overhaul. Mark Zandi, Moody’s Chief Economist, says: “I take a great deal of solace in recent numbers. The stability in non-distressed prices is encouraging and suggests an underlying stability in the overall housing market. If you can implement policies that reduce the share of distressed sales of the total market, housing should see a dramatic recovery quickly.”
Zandi states that there are three fundamental problems with the housing sector today:
-Valuation – While housing values are back to normal in comparison to income, they’re still a bit high compared to rents.
-Overbuilding – The market is still burdened from past overbuilding, with another two years or so needed to work through excess inventory.
-Foreclosure – He believes that the share of distressed sales in the entire market will go down over the next two years.
Three incremental fixes are proposed to solve housing problems without major initiatives:
1. Fannie Mae and Freddie Mac should make refinancing easier and help in principal reductions.
2. The state’s attorneys general suit against the banks must get settled so that foreclosures can proceed again at a normal pace to clear out inventory.
3. Credit needs to get back to normal. Only loans of “outstanding quality” are being made now, and more people should be able to get a mortgage with normal credit scores.
Our young people are hoping for more employment opportunity, and some of that will come with an improved housing market.