This article from Businessweek outlines the factors that are leading to a resurgence of young buyers to the housing market, including faster economic growth and a labor market that’s approaching what the Federal Reserve calls “full employment,” meaning anyone who wants a job has one. An increase in first-time buyers, whose market share dropped to a record low last year, will provide a boost to the sluggish mortgage industry.
“Credit tightness has been an issue for the housing market but demand weakness has been a bigger one,” said Douglas Duncan, chief economist at mortgage giant Fannie Mae in Washington. “The improving economy is going to put renters in a better place to buy.”
Duncan predicts a 6.3 percent increase in mortgage lending for purchases this year after a drop of 9.6 percent in 2014. He said increasing confidence in the job market is the strongest indicator home sales will improve.
The Thomson Reuters/University of Michigan consumer sentiment poll showed last month that consumers expect an increase of 1.7 percent in their incomes in 2015, the highest since 2008. Those under 45-years-old expect the biggest gain, at 4.7 percent.
