Tags: Kiefer | job | homeownership | growth

Freddie Mac's Kiefer: Job Growth Won't Spark 'Big Pop' in Homeownership

By    |   Thursday, 12 February 2015 10:14 AM

Many housing experts have predicted that the sharp upswing in hiring — payrolls advanced more in the last three months than in any other such period in the last 17 years — will lead more Americans to buy homes.

Don't bet on it, says Leonard Kiefer, deputy chief economist at Freddie Mac. The problem? "What we find is that many of America's fastest growing careers (in terms of numbers of workers) have average or below average homeownership rates," he writes in a report.

"At the same time, the professions with higher homeownership rates are generally headed for average or subpar growth."

The Bureau of Labor Statistics predicts that the majority of job growth in the next decade will come in retail sales, food preparation and cashier jobs. Workers in those sectors have lower homeownership rates than the national average of 64 percent.

"Over the long run, it's not going to be supportive of a big pop in homeownership," Kiefer says, according to CNBC. www.cnbc.com/id/102417008

Meanwhile, "jobs in the professions with higher homeownership rates (70 percent or more) are likely to see average [job] growth (10 percent) or less," he writes. That includes engineers, lawyers, doctors and computer professionals.

"Unless there is a significant change in the job market or wages for the fastest growing professions, the current jobs outlook does not suggest a major uptick in domestic home buying power going into the next decade. This also suggests the debate over how best to support sustainable homeownership will continue to be important in coming years."

The overall homeownership rate of 64 percent stands at its lowest level in 20 years. But that's not a bad thing, says Yahoo Finance columnist Rick Newman.

"What's really going on is the last bit of air squeaking out of a 20-year housing bubble that obscured the pitfalls of owning a home, while exaggerating the virtues," he writes. "The homeownership rate is now back to its historical average — where it probably ought to be."

A high homeownership rate doesn't necessarily have much to do with a strong economy, Newman notes.

"It's very clear, meanwhile, that buying a home is a huge commitment of money, and that it also locks the buyer in place for several years, at a minimum, unless taking a loss on a quick resale is no big deal."

Homeownership doesn't make sense for everyone, Newman points out. A mortgage "can be a disastrous commitment for those who are unprepared."

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Many housing experts have predicted that the sharp upswing in hiring — payrolls advanced more in the last three months than in any other such period in the last 17 years — will lead more Americans to buy homes.
Kiefer, job, homeownership, growth
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2015-14-12
Thursday, 12 February 2015 10:14 AM
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