U.S. employment figures remain wobbly and that is significantly shaping the housing market, according to the Wall Street Journal. Workers entering the job market face a lack of security and falling wages, keeping an initial down payment on a single-family home and mortgage unaffordable for many, despite the Federal Reserve’s promise to keep interest rates low through next year. So in lieu of owning, Americans are increasingly renting, and the construction of new multi-family building is, to a large degree, propping up the housing market.
Even though the market has supposedly bottomed-out, it may take years for young workers and those who defaulted during the recession to enter the single-family housing market. Rental vacancies are currently at their lowest level since 2002 and, naturally, rents are rising. In July they rose 5.3 percent year-over-year, according to Trulia data. But the fact that the popularity of rentals continues to rise despite high-rents means that the multi-family industry will remain essential to the recovering economy. [WSJ] – Christopher Cameron