Whether you believe the accuracy of the 7.8% unemployment rate announced by the Bureau of Labor Statistics this fall or that the government is manipulating the unemployment numbers to affect the presidential election, one thing is certain: the government isn’t funding potential home buyers’ lack of ambition when it comes to a milestone investment such as financing a home. Unemployment rates are only a piece of the puzzle when it comes to understanding why some U.S. families may be redistributing funds they had previously set aside for a home sweet home. The bigger picture suggests that a reduced sense of urgency, types of employment, and the unique circumstances of the “baby boom” generation will also keep the real estate market stagnant at least into the next few years.

Unemployment Impacts Housing

Purchasing a home has long been a big financial undertaking. For many, the thought of a looming home loan becoming more and more swollen with interest over the next 20-30 years isn’t exactly the most alluring aspect of having your own hearth to decorate each holiday. In short, it’s a decision you can drag your feet to make; combine that with the fact that the market is currently tipped in favor of buyers who have more time and reduced pressure to find a quality, affordable home without fear of their options disappearing. In this buyer’s market, families looking for a new home know they have the luxury of more and better options when it comes to financing and overall home prices and they’re taking their time. According to CNN Money, home prices are down on a national average of 34% (although home prices have increased five months in a row as of October 2012) although they’re predicted to increase in the coming years, the increase won’t be substantial enough to spur would-be homeowners into a buying frenzy. [Read more…] about The Impact of Unemployment on Housing