NEW YORK (MainStreet) -- There is some good news on the home-buying front, but there’s one key consumer demographic that seems to be missing in action: young people.
According to Realtor.org, home sales are on the mend, up 7.7% from July to August. Better yet, new home sales were up 18% on a year-to-year basis, the organization reports.
“Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” says Lawrence Yun, NAR’s chief economist. “Investors were more active in absorbing foreclosed properties. In addition to bargain hunting, some investors are in the market to hedge against higher inflation.”
But not everyone is able to get in on the fun. A new University of Iowa study shows that younger Americans are increasingly walled off from homeownership.
The study says that 20- and even 30- and 40-somethings have suffered disproportionately in the economic downturn, and can’t get the financing or are too worried about money to gather up the financial resources needed to buy a new home.
The data was compiled by University of Iowa economics professor Martin Gervais at the Tippie College of Business. He says that homeownership among the nation’s younger consumers was already in decline since 1980 (Gervais defines “younger” consumers as the 25-44 age group).
Only 57% of that demographic owned their own home in 2007, and that’s down from 61% in 1980. Gervais estimates that number is “even lower today”.