Young Vero Beach Homeowners Hurt by Employment Woes
Young Vero Beach homeowners, as well as those "wanting to be homeowners" are struggling in the job market, which points to possible bad news for the housing industry.
According to the Bureau of Labor and Employment Statistics, only 74.8% of young adults are working — the lowest number in 12 months and far below normal levels. During the recession, between 73% and 74% of young adults were employed.
In addition to their struggles to find a job, many young adults are buried in a mountain of student debt. In fact, student loans are now the largest component of non-mortgage and home equity debt at $994 million.
So how are these unemployed and indebted young adults supposed to become Vero Beach homeowners and help the liquidity of the housing industry?
Mark Palim, vice president for applied economics and housing research at Fannie Mae, says that lack of job security is the biggest factor keeping young adults out of a home. "If you don't have income and if you don't think you’re going to be living somewhere for awhile because of a lack of job stability, then it makes perfect sense that you're not going to be buying a house," Palim said.
Student debt is inhibiting the ability to come up with a down payment for many young adults to become Vero Beach homeowners. The main idea is that it stretches out the amount of time it takes to pull together enough money. For those who can manage, they are often forced to handle a smaller mortgage.
Many homeowners who were on the verge of retirement, with funds set aside, were forced to spend that money on other things as money got tight during the recession. This translates into more people in the 55-plus-age group still in the labor force.
"They're not leaving the labor force," said Palim. Because many older adults are sticking around in the job market, there is less availability for young adults.
It may be some time before young adults can become Vero Beach homeowners. In the meantime, many are resorting to renting either single-family homes or within the multifamily sector.