Tag Archives: young adults

BLS: Midland Texas Again Posts Third Lowest Jobless Rate In Nation

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Midland Reporter-Telegram

For the second straight month, Midland posted the third lowest unemployment rate in the nation, according to figures released Wednesday by the Bureau of Labor Statistics.

Bismarck, North Dakota, topped the list for the fourth straight month with a jobless rate of 2.1 percent. Fargo, North Dakota, was second at 2.3. Midland and Logan, Utah, tied for third at 2.6.

 

A total of 10 metropolitan statistical areas around the nation posted unemployment rates of 3.0 percent or lower. Midland was the lone MSA in Texas at or below 3.0.

Midland again ranked near the top of the list of MSAs in the nation when it came to percentage gain in employment. Midland’s 6.4 percent growth ranked second to Muncie, Indiana (8.9 percent). In September, Midland showed a work force 100,100, an increase of nearly 5,000 from September 2013.

The following are the lowest unemployment rates in the nation during the month of September, according to the Bureau of Labor Statistics.

Bismarck, North Dakota 2.1

Fargo, North Dakota 2.3

Midland 2.6

Logan, Utah 2.6

Sioux Falls, South Dakota 2.7

Grand Forks, North Dakota 2.8

Lincoln, Nebraska 2.8

Mankato, Minnesota 2.9

Rapid City, South Dakota 2.9

Billings, Montana 3.0

Lowest rates from August

Bismarck, North Dakota 2.2, Fargo North Dakota 2.4; Midland 2.8. Also: Odessa 3.4

July

Bismarck, North Dakota, 2.4; Sioux Falls, South Dakota, 2.7; Fargo, North Dakota, 2.8; Midland 2.9. Also: Odessa 3.6

June

Bismarck, North Dakota, 2.6, Midland 2.9, Fargo, North Dakota, 3.0. Also: Odessa 3.6

May

Bismarck, North Dakota, 2.2, Fargo, North Dakota, 2.5, Logan, Utah, 2.5, Midland 2.6. Also: Odessa 3.2

April

Midland 2.3, Logan, Utah 2.5, Bismarck, North Dakota 2.6, Ames, Iowa 2.7. Also: Odessa 2.9

March

Midland 2.7, Houma-Bayou Cane-Thibodaux, La. 3.1, Bismarck, N.D. 3.1, Odessa 3.3, Fargo, N.D. 3.3, Ames, Iowa 3.3, Burlington, Vt. 3.3

February

Houma-Bayou Cane-Thibodaux, La. 2.8; Midland 3.0; Lafayette, La. 3.1

January

Midland 2.9; Logan, Utah 3.3; Bismarck, N.D. 3.4

December

Bismarck, N.D. 2.8; Logan, Utah 2.8; Midland 2.8

Home Ownership Rate Since 2005

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by Wolf Richter

The quintessential ingredient in the stew that makes up a thriving housing market has been evaporating in America. And a recent phenomenon has taken over: private equity firms, REITs, and other Wall-Street funded institutional investors have plowed the nearly free money the Fed has graciously made available to them since 2008 into tens of thousands of vacant single-family homes to rent them out. And an apartment building boom has offered alternatives too.

Since the Fed has done its handiwork, institutional investors have driven up home prices and pushed them out of reach for many first-time buyers, and these potential first-time buyers are now renting homes from investors instead. Given the high home prices, in many cases it may be a better deal. And apartments are often centrally located, rather than in some distant suburb, cutting transportation time and expenses, and allowing people to live where the urban excitement is. Millennials have figured it out too, as America is gradually converting to a country of renters.

So in its inexorable manner, home ownership has continued to slide in the third quarter, according to the Commerce Department. Seasonally adjusted, the rate dropped to 64.3% from 64.7 in the prior quarter. It was the lowest rate since Q4 1994 (not seasonally adjusted, the rate dropped to 64.4%, the lowest since Q1 1995).

This is what that relentless slide looks like:

US-quarterly-homeownership-rates-1995-2014

Home ownership since 2008 dropped across all age groups. But the largest drops occurred in the youngest age groups. In the under-35 age group, where first-time buyers are typically concentrated, home ownership has plunged from 41.3% in 2008 to 36.0%; and in the 35-44 age group, from 66.7% to 59.1%, with a drop of over a full percentage point just in the last quarter – by far the steepest.

Home ownership, however, didn’t peak at the end of the last housing bubble just before the financial crisis, but in 2004 when it reached 69.2%. Already during the housing bubble, speculative buying drove prices beyond the reach of many potential buyers who were still clinging by their fingernails to the status of the American middle class … unless lenders pushed them into liar loans, a convenient solution many lenders perfected to an art.

It was during these early stages of the housing bubble that the concept of “home” transitioned from a place where people lived and thrived or fought with each other and dealt with onerous expenses and responsibilities to a highly leveraged asset for speculators inebriated with optimism, an asset to be flipped willy-nilly and laddered ad infinitum with endless amounts of cheaply borrowed money. And for some, including the Fed it seems, that has become the next American dream.

Despite low and skidding home ownership rates, home prices have been skyrocketing in recent years, and new home prices have reached ever more unaffordable all-time highs.

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Assisted-Living Complexes for Young People

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by Dionne Searcey

One of the most surprising developments in the aftermath of the housing crisis is the sharp rise in apartment building construction. Evidently post-recession Americans would rather rent apartments than buy new houses.

When I noticed this trend, I wanted to see what was behind the numbers.

Is it possible Americans are giving up on the idea of home ownership, the very staple of the American dream? Now that would be a good story.

What I found was less extreme but still interesting: The American dream appears merely to be on hold.

Economists told me that many potential home buyers can’t get a down payment together because the recession forced them to chip away at their savings. Others have credit stains from foreclosures that will keep them out of the mortgage market for several years.

More surprisingly, it turns out that the millennial generation is a driving force behind the rental boom. Young adults who would have been prime candidates for first-time home ownership are busy delaying everything that has to do with becoming a grown-up. Many even still live at home, but some data shows they are slowly beginning to branch out and find their own lodgings — in rental apartments.

A quick Internet search for new apartment complexes suggests that developers across the country are seizing on this trend and doing all they can to appeal to millennials. To get a better idea of what was happening, I arranged a tour of a new apartment complex in suburban Washington that is meant to cater to the generation.

What I found made me wish I was 25 again. Scented lobbies crammed with funky antiques that led to roof decks with outdoor theaters and fire pits. The complex I visited offered Zumba classes, wine tastings, virtual golf and celebrity chefs who stop by to offer cooking lessons.

“It’s like an assisted-living facility for young people,” the photographer accompanying me said.

Economists believe that the young people currently filling up high-amenity rental apartments will eventually buy homes, and every young person I spoke with confirmed that this, in fact, was the plan. So what happens to the modern complexes when the 20-somethings start to buy homes? It’s tempting to envision ghost towns of metal and pipe wood structures with tumbleweeds blowing through the lobbies. But I’m sure developers will rehabilitate them for a new demographic looking for a renter’s lifestyle.

He’s the Top U.S. Mortgage Salesman. His Daughter Isn’t Buying It

David Stevens, president and chief executive officer of the Mortgage Bankers Association, stands with his daughter Sara Stevens in the Senate Russell Building in Washington, D.C., on June 5, 2014.

Photographer: Andrew Harrer/Bloomberg
David Stevens, president and chief executive officer of the Mortgage Bankers Association, stands with his daughter Sara Stevens in the Senate Russell Building in Washington, D.C., on June 5, 2014.

David Stevens, chief executive officer of the Mortgage Bankers Association, has spent his career lauding the merits of home ownership. One person still isn’t buying it: his daughter.

Sara Stevens, 27, knows interest rates are low, rents are high and owning a home can build wealth. She also had a front-row seat to the worst real-estate slump since the Great Depression.

“The world has changed,” she said.

Six years since the collapse of Lehman Brothers triggered a financial meltdown, some young adults are more risk averse and view the potential upsides of status and wealth more skeptically than before the crisis, altering the home ownership calculation. It’s more than the weight of student loans, an iffy job market and tight credit — even those who can buy are hesitant.

The doubt is so pervasive that it’s eroded entry-level sales and hampered the recovery. In May, the share of first-time buyers fell for the third month, to 27 percent, according to the National Association of Realtors. Historically, it’s been closer to 40 percent of all buyers.

“We have a younger generation that has sat on the front lines of this housing recession,” said Stevens, 57. “They’re clearly being more thoughtful about it and they’re clearly deferring that decision.”

Dad’s sales pitches started when Sara was 4 years old, big sister to a fussy newborn. To calm the baby, he would load both girls into the family’s Ford Taurus.

Early Indoctrination

“We would drive around neighborhoods and he would point out houses,” chattering about curb appeal and prices, Sara said. “I’ve heard about this my whole life. In my head, I always figured at the age of 27 or 28 I’d buy.”

She can, but hasn’t. She’s a legislative aide to Senator Michael Bennet, a Colorado Democrat. Her fiancé, Dan Nee, is a software developer. Their jobs are steady and their combined income is $107,500. The car is paid for and dad is ready to help with a down payment.

They surf listings on Zillow Inc. from their 765-square-foot one-bedroom in Arlington, Virginia, which costs $2,195 a month, not including parking, utilities and a $35 fee for Max the cockapoo. They have about $25,000 in student debt.

The couple’s rent-or-own conundrum is complicated by the quality of their apartment, which is in the thick of urban nightlife and steps from a subway line to Sara’s job on Capitol Hill. More-affordable neighborhoods have higher crime and fewer amenities, or they’re farther from downtown and require a second car. A fixer-upper, while cheaper, means headaches.

Financially Insecure

“A house is a five- to 10-year commitment,” Sara said. “I’m hesitant about diving in and feeling like I’m not financially ready.”

She and other millennials — the generation born beginning in the early 1980s — started coming of age just as housing collapsed. Sara was just out of college in 2009 when President Barack Obama put her dad in charge of the Federal Housing Administration. Part of his job was to lobby Congress not to dismantle the financial architecture that had made it possible for generations of Americans — including himself — to buy homes. He also was juggling pleas from family and friends who couldn’t pay their adjustable-rate mortgages or sell their devalued houses.

“I watched cousins and other family members go through pretty tough situations in 2008 and 2009,” Sara said. “I can’t tell you how many of them he tried to help get out of bad mortgages.”

Generational Impact

As FHA commissioner, her dad would wonder aloud how the recession might affect Sara and her generation.

Most still aspire to own, though just 52 percent consider homeownership an “excellent long-term investment,” according to an April survey from the Chicago-based John D. and Catherine T. MacArthur Foundation. And almost three-fourths of adults 18 to 34 years old say the U.S. still is in the throes of a housing crisis, a bigger share than any other age group.

Without first-time buyers, current owners have a harder time selling and trading up, depressing the market and dragging down the economy. U.S. homeownership fell for the ninth straight year in 2013, to 65.1 percent, according to the Commerce Department. The MBA is projecting sales will decline for the first time in four years.

“We need more warm bodies buying homes and first-time buyers are the way to get it,” said Mark Fleming, the Vienna, Virginia-based chief economist of property-data firm CoreLogic Inc.

Taking Plunge

David Stevens took the plunge in 1984, when he was 27 and engaged, like Sara is now. The rate on a 30-year fixed mortgage averaged 13.9 percent as Paul Volcker, then chairman of the Federal Reserve, tried to tame inflation. Home prices were picking up again after back-to-back recessions had reined in double-digit increases seen during the late 1970s.

Stevens paid $73,400 for a three-bedroom, one-bath rambler near Denver. He assumed a 12.5 percent FHA mortgage, putting no money down. Colorado had been hammered by a plunge in oil prices and the seller owed more on the house than it was worth.

“It was similar to the environment we’re in now,” Stevens said, calling the house “an incredible deal.”

On paper, young adults are better positioned to buy now than they were 30 years ago. Affordability for entry-level buyers is more than twice as good, according to the National Association of Realtors. Mortgage payments as a share of income, at 14.2 percent, are half what they were, according to the Realtors. Unemployment among 25- to 34-year-olds, 6.9 percent in the first quarter of this year, was 7.9 percent at the start of 1984.

Greater Urgency

Back then, there was an urgency to get into the market, said John Buckley, managing director of the Harbour Group, a Washington public relations firm and consultant on the MacArthur Foundation’s report. It’s different now, said Buckley, who was a spokesman for President Ronald Reagan’s re-election bid in 1984.

“There was a sense that the window was closing to get a good deal and be able to participate in the American dream,” Buckley said. Today, there’s “tremendous uncertainty about whether the value of that investment is going to be worth the commitment and risk.”

Of course it’s more than negative psychology at work. Student loan debt has more than tripled in the past decade, to more than $1.1 trillion. And it’s harder to get a mortgage. While Fannie- and Freddie-backed borrowers have an average score of 740, most young adults have credit scores below 700, according to FICO, a credit-reporting company.

Channeling Grandma

“We’ve weathered the storm of the crash and Lehman going under better than they have,” said Fleming, 42, calling millennials jaded. “Like their grandparents who went through the depression, they’re apprehensive about overextending themselves.”

At the Stevens household, it’s not lost on Sara that a cheerleader-in-chief for housing can’t get a rah-rah out of his daughter, especially when she’s done everything right. She has an education, a job and dad’s support, financially and otherwise.

“I am incredibly lucky,” she said. “My parents have positioned me well and they’ve given me resources to take on a house if I really wanted to. I think that’s part of his worry. If we’re still having this conversation, what’s it like for a whole generation of other kids?”

29% Of All U.S. Adults Under The Age Of 35 Are Living With Their Parents

Source: The Economic Collapse

Why are so many young adults in America living with their parents?  According to a stunning Gallup survey that was recently released, nearly three out of every ten adults in the United States under the age of 35 are still living at home with Mom and Dad.  This closely lines up with a Pew Research Center analysis of Census data that looked at a younger sample of Americans which found that 36 percent of Americans 18 to 31 years old were still living with their parents.  That was the highest level that had ever been recorded.  Overall, approximately 25 million U.S. adults are currently living at home with their parents according to Time Magazine.  So what is causing all of this?  Well, there are certainly a lot of factors.  Overwhelming student loan debt, a depressing lack of jobs and the high cost of living are all definitely playing a role.  But many would argue that what we are witnessing goes far beyond temporary economic conditions.  There are many that believe that we have fundamentally failed our young people and have neglected to equip them with the skills and values that they need to be successful in the real world.

More Americans than ever before seem to be living in a state of “perpetual adolescence”.  As Gallup noted, one of the keys to adulthood is to be able to establish independence from your parents…

An important milestone in adulthood is establishing independence from one’s parents, including finding a job, a place to live and, for most, a spouse or partner, and starting one’s own family. However, there are potential roadblocks on the path to independence that may force young adults to live with their parents longer, including a weak job market, the high cost of living, significant college debt, and helping care for an elderly or disabled parent.

Unfortunately, it is becoming increasingly difficult for young people to become financially independent.  While they are in high school, we endlessly pound into their heads the need to go to college.  Then we urge them to take out whatever loans that they will need to pay for it, ensuring them that they will be able to get “good jobs” which will enable them to pay off those loans when they graduate.

Of course a very large percentage of them find that there aren’t any “good jobs” waiting for them when they graduate.  But because of the crippling loans that they have accumulated, they quickly realize that they have decades of debt slavery ahead of them.

Just consider the following numbers about the growth of student loan debt in the United States…

-The total amount of student loan debt in the United States has risen to a brand new all-time record of 1.08 trillion dollars.

-Student loan debt accounted for 3.1 percent of all consumer debt in 2003.  Today, it accounts for 9.4 percent of all consumer debt.

-In the third quarter of 2007, the student loan delinquency rate was 7.6 percent.  Today, it is up to 11.5 percent.

This is a student loan debt bubble unlike anything that we have ever seen before, and it seems to get worse with each passing year.

So when is the bubble going to finally burst?

Meanwhile, our young adults are still really struggling to find jobs.

For those in the 18 to 29-year-old age bracket, it is getting even harder to find full-time employment.  In June 2012, 47 percent of those in that entire age group had a full-time job.  One year later, in June 2013, only 43.6 percent of that entire age group had a full-time job.

And in many ways, things are far tougher for those that didn’t finish college than for those that did.  In fact, the unemployment rate for 27-year-old college dropouts is nearly three times as high as the unemployment rate for those that finished college.

In addition, since Barack Obama has been president close to 40 percent of all 27-year-olds have spent at least some time unemployed.

So it should be no surprise that 27-year-olds are really struggling financially.  Only about one out of every five 27-year-olds owns a home at this point, and an astounding 80 percent of all 27-year-olds are in debt.

Even if a young adult is able to find a job, that does not mean that it will be enough to survive on.  The quality of jobs in America continues to go downhill and so do wages.

The ratio of what men in the 18 to 29-year-old age bracket are earning compared to what the general population is earning is at an all-time low, and American families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

No wonder so many young people are living at home.  Trying to survive in the real world is not easy.

Many of those that are trying to make it on their own are really struggling to do so.  Just consider the case of Kevin Burgos.  He earns $10.50 an hour working as an assistant manager at a Dunkin Donuts location in Hartford, Connecticut.  According to CNN, he can’t seem to make enough to support his family no matter how hard he works…

He works 35 hours each week to support his family of three young children. All told, Burgos makes about $1,800 each month.

But his bills for basic necessities, including rent for his two-bedroom apartment, gas for his car, diapers and visits to the doctor, add up to $2,400. To cover these expenses without falling short, Burgos would need to make at least $17 per hour.

“I am always worried about what I’m going to do for tomorrow,” Burgos said.

There are millions of young people out there that are pounding their heads against the wall month after month trying to work hard and do the right thing.  Sometimes they get so frustrated that they snap.  Just consider the following example

Health officials have temporarily shut down a southern West Virginia pizza restaurant after a district manager was caught on surveillance video urinating into a sink.

Local media reported that the Mingo County health department ordered the Pizza Hut in Kermit, about 85 miles southwest of Charleston, to shut down.

But as I mentioned earlier, instead of blaming young people for their failures, perhaps we need to take a good, long look at how we have raised them.

The truth is that our public schools are a joke, SAT scores are at an all-time low, and we have pushed nearly all discussion of morality, values and faith out of the public square.

No wonder most of our young people are dumb as a rock and seem to have no moral compass.

Or could it be possible that I am being too hard on them?