New Housing Difficult for Young Home Buyers

Author:	Lucas Jones
Source:	Homes Discovered
Date:	December 7, 2006

Since we are in such a buyers market many people think it would be easy for anyone to buy a home right now in Cleveland due to the large number of homes available, low interest rates and sellers offering many incentives.  Yet, this is simply not the case for many young adults looking to buy their first home.  These days, even though it is a buyers market, it is increasingly difficult for young adults to afford a mortgage payment. Many marginal buyers got swepped up into the realty boom of last year and used exotic mortgages with low initial rates to purchase their first home.  Many others are simply unwilling to accept a mortgage contract that they cannot pay with one half of a couple's paycheck.  Many of those marginal buyers who used the exotic mortgages to afford a home are now slipping into the unaffordable realm as their rates keep adjusting upwards.  Yet those who wouldn't pay a majority of their incomes to own a home are still stuck renting. Today's economy is shifting and many young adults in the Columbus area are not capable of starting and sustaining a family, building a career, and saving money the same way generations of the past have.  One of the issues has to do with the rising cost of higher education.  Tuition at public universities has tripled in the past thirty years and the amount of debt that young adults average after graduation is significantly higher than it was 10 years ago.  In addition to this, incomes for young adults has been on the decline for years and employer sponsored benefits are evaporating as well. Rising rental costs is also a major contributer to young adults' inability to afford housing and raise a family the way people have done in the past.  A growing percentage of young adults are now faced with the reality that they have to pay over 30% of their income, which is the standard threshold of affordability, on their rent.  All these things combined are increasing the amount of time it is taking young adults to save for the down payment of a home.  Many others are still living check to check, week to week. Many people are pointing to the new 110th Congress to alleviate many of the economic pressures facing young adults.  This is a major problem growing in American Society and we can only hope that the Congress helps alleviate the financial burden facing young adults.

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