WASHINGTON – Feb. 10, 2014 – While job growth is picking up across the country, wages remain flat, which is holding back a more robust recovery, the National Association of Home Builders wrote in a recent blog post.
“A significant amount of pent-up housing demand exists, but for it to be unlocked more rapidly, additional gains in wages must be realized,” NAHB economists wrote.
During the recession, all age groups saw a decline in incomes, with the exception of the 65-and-older cohort. Since 2000, those under the age of 24 have seen the largest reductions in income, followed by people ages 45 to 54 (the top-earning age group), NAHB’s analysis shows.
First-time homebuyers remain a shrinking number in the housing market. They accounted for 27 percent of existing-home purchases in December, down from 30 percent a year earlier, according to the National Association of Realtors®.
Many young adults are facing high student loan debt that is stifling their wage growth and ability to qualify for a mortgage.
“Student loans are one of the fastest rising sources of debt,” according to a recent post on NAR’s Economists’ Outlook blog. “Student loans are of increasing concern in light of the regulations pertaining to qualified mortgages that require a consumer to have a debt-to-income ratio of no more than 43 percent.”
NAHB says that income growth will be a key metric to watch for the future of new and existing home sales. While home sales are looking up for 2014, NAHB notes that any additional gains in median incomes will help the recovery stretch further.
Source: Realtor® Magazine
© 2014 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.