Renting is the new black, but…
Although much of the stigma surrounding renting a home, apartment, or condo has diminished, and the Millennial generation is accustomed to and fully accepting of the concept of renting, two new studies reveal that the American dream of homeownership still alive and well, and that landlords are often “accidental” landlords.
Living the American Dream involves homeownership, says study
According to a new study1 released by TD Bank, 84 percent of today’s younger renting generation (ages 18-34) intend to buy a home in the future, and over half say homeownership is a vital part of the American dream and associate feelings of pride and excitement surrounding their first purchase. First-time homebuyers are more likely to cite achieving the American dream as a primary motivation for buying their first home, implying the dream is alive and well.
“There’s no denying buying a home is a pivotal point in a person’s life. Our survey tells us that people are looking to buy homes, and attitudes towards homeownership have continued to remain positive over the years,” said Michael Copley, executive vice president of retail lending, TD Bank.
The study did not reveal when the younger generation intends to purchase, but it is highly likely that the pressure is not as great as previous generations, and the wait may be longer than in the past.
Accidental landlords, the state of landlording
Many of the younger generation who have already purchased have become “accidental” landlords like many Americans of all ages, with 59 percent of landlords citing they qualify as “accidental” landlords, according to a LeaseRunner.com’s just released Rental Industry Report2 which studies the rental market from the viewpoint of brokers, landlords, and property managers.
The company says the most recent report “highlights the diverse challenges landlords face when managing rental properties, touching on finding the right tenant, lease execution, tenant screening, rent collection and tenant eviction,” noting that two in three landlords have had to evict tenants, with half citing late rent as the primary reason.
Respondents identified finding the right tenant as the toughest challenge, with cash flow weighing in as the least challenging – likely due to the high demand for rentals and therefore landlords’ ability to charge higher rent.
When asked which transaction during the leasing process consumes the most time, 65 percent of respondents reported listing and showing property as their most time consuming obligation, followed by lease execution. Of landlords who have taken the lease process online (paperless), 73 percent say it has strengthened their relationship with their tenant.
“With the surge of renters entering the market, landlords and rental industry professionals, not all of whom have experience managing property, are pressed to deal with more rental applicants, screenings, lease executions, and payments,” said LeaseRunner CEO Joe Buczkowski. “High rents and low vacancy rates do present difficulties for renters looking for a place to live, but we should be equally concerned about the challenges faced by landlords, brokers, and property managers – many of whom are also the consumer who has been forced into managing property by circumstance rather than choice.”
Boomers retirement may be the true reason behind the labor shortage
(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.
In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.
Why Boomers are leaving the labor force
CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:
- Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
- The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
- Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.
As Boomers retire, how does this impact the overall labor economy?
According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.
Is the real estate industry endorsing Carson’s nomination to HUD?
(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?
NAR strongly backs Dr. Carson’s nomination
When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”
At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?
The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.
In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…
Job openings hit 14-year high, signaling economic improvement
The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.
Job openings hit a high point
To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.
The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.
Good news, bad news, depending on your profession
That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.
Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.
If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.
If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.
Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.
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