Homeownership may no longer be a goal for many Americans

Mortgage loan restrictions, weak consumer confidence and an influx of foreclosure properties are hurting the housing market, which is believed to be a main driver of the economic recovery. PIMCO reported that the current state of the housing market shows no signs of a recovery in the foreseeable future.

According to PIMCO, while there is a large supply of low-priced houses on the market, prospective buyers are unable to meet strict requirements to get a mortgage loan. As students continue to graduate with a burdensome amount of college loan debt and enter a weak job market, there will be fewer first-time homebuyers homebuyers during the next 10 years who are able to save up the necessary 20 percent needed for a down payment that meets Qualifying Residential Mortgage criteria.

Those entering retirement age are equally less likely to invest in a larger home purchase as the retirement outlook of many remains uncertain. Some baby boomers have lost large amounts of savings due to the economic downturn, and the state and municipal retirement plans still appear to be under threat.

Current trends indicate government will be less involved in the distribution of mortgages, leaving the private sector to raise rates despite having minimal bank capital available for supporting mortgage lending, the news source reports. 

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