83% of the college graduating class of 2014 do not have a job:
83% of graduating seniors said they didn’t have a job lined up as of April 2014, despite 72.7% reporting that they were actively looking for one. This is a jump from the 80% of graduating seniors who didn’t have a job lined up at the same time last year. (Article Link)
This is your first-time buyer cohort which historically has represented 40% of the housing market.
The housing market bulls are making a big deal out of the fact that the percentage of cash buyers is rising. This is actually very bearish. As the number of true, organic buyers declines, its mathematically guaranteed that cash sales as percent of total sales will increase.
Why is this bearish? Because according the NAR statistics, the majority of cash sales go to individual “investors,” i.e. “flippers.” If real, end-user buyers don’t show up to buy, to whom will the flippers flip?
In other words, the housing market has become analogous to a Ponzi scheme. But when the music stops…