Sluggish Economy Forces People to Downsize Homes [AUDIO]
Recovery from the recession started nearly four years ago, and the housing sector is still feeling the downturn's impact. Instead of "movin' on up," many Americans have been forced to downsize in terms of where they live.
Census data released this week shows about four million Americans moved locally during the recession. Many of them moved to cheaper housing or decided to live with friends and family. Folks weren't making their moves because they wanted to, though.
Financial constraints were forcing them to stay somewhere they could afford.
Patrick O'Keefe, Director of Economic Research at CohnReznick in Roseland, said the nation has gained some distance from that period. However, shifts in the housing market are still evident. He admitted the demand today is for housing that's smaller and less expensive.
"The dream of homeownership is still alive, but it has been severely dented by the events over the past five years," O'Keefe said. "I think there are, within the market itself, a number of shifts going on with respect to the types of housing that people want versus the types of housing that we have constructed in the past."
Recovery is Sluggish
The nation's recovery has been a very sluggish one. There are fewer jobs today than before the recession began, and current earnings adjusted for inflation are in line with where they were in 2008.
O'Keefe noted a demographic factor is also contributing to the housing shift. A generation of baby boomers is beginning to look for homes that are smaller and economically-less demanding than what they had in their adult years.