AtlanticCity.com: Possible first-time homebuyers have been staying home instead — in their rented apartments — and not buying houses that could be in their price range. And that socio-economic phenomenon has been rippling through the rest of the housing market and holding back its recovery from the 2008 recession, a pair of economists told a room full of home builders in Atlantic City Wednesday.
Kevin Gillen, of Meyers Research, led off with that bit of bad news in a speech to the annual Atlantic Builders Convention at the Atlantic City Convention Center. And young people choosing to rent, not buy, has a long list of implications for the housing industry, said Gillen, the chief economist of a California company whose specialty is analyzing residential real estate.
First-time buyers are “nearly AWOL from the housing market,” Gillen said, adding later that those non-starter buyers of starter homes are the missing “domino” in a full recovery. They have done everything from skewing home-price statistics upward — by holding down the number of low-priced sales — to making rental prices “artificially high,” he said…
And many of those non-buyers aren’t even renting — they’re moving home with their parents after college, Gillen added. He cited national statistics saying that in 2006, about 25 percent of college graduates moved back with their parents. Now, the figure is closer to 35 percent… (more)
The article points out the over-dependence of the U.S economy on house construction.
The average household size can hardly get much smaller and population growth is as low as ever.