Job and economic expansion is boosting the next wave of first time and move-up homebuyers
For 10 years, I have held a core belief that the U.S. housing market would not fully recover in terms of mortgage demand until sometime between 2020 to 2024.
From the span of 2008 to 2019, we had the weakest new home sales and housing starts cycle ever. But, we also had the most prolonged economic and job expansion ever.
Case in point, last week the U.S. added one more stable jobs report to the streak of 112 straight months of job gains. This is the fertile economic ground to which the most massive demographic patch of 26 to 32-year-olds will come into “home-buying age.” Currently, the median first-time homebuyer age is 33. Back in 1981, it was 29.
Labor force growth for ages 25 to 54 has been on an upswing since the lows of 2015, so some of these would-be home buyers should have the economic chops necessary to enter into homeownership. The graph below shows this trend:
