There is much about the U.S. economy with which to be pleased. Real gross domestic product appears to be tracking above 3 percent during the current quarter. Job gains have accelerated.
As indicated by Moody’s Analytics, payrolls are steadily expanding in two-thirds of industries and in three fourths of metropolitan areas. If the current rate of growth is sustained, the economy will return to full employment by late 2016. That means an unemployment rate near 5.5 percent, a labor force participation rate up to 64 percent, and a decline in the number of part-time workers seeking full-time work to normal levels. The last time the economy was at full employment was 2006.
However, one key industry is no longer fully participating in the recovery – housing. Among the primary issues are first time buyers, who traditionally account for approximately 40 percent of home sales. Tough financial conditions associated with those in their 20's and 30's, coupled with memories of the housing collapse, have conspired to complicate decisions regarding home purchases. Last summer’s surge in mortgage rates didn’t helped. Moody’s suggests that the market is also bedeviled by differing perceptions among buyers and sellers regarding the appropriate price for homes.