Millennials not quite ready to start buying homes yet

On Friday, the Bureau of Labor reported that hiring remained strong in January. Average hourly wages rose, too.

"The fact that jobs are stable means that potential home buyers feel more stable," said Danielle Hale, director of housing statistics at the National Association of Realtors.

For several years now, that hasn't been the case. Stagnant wages and unemployment among young people -- the demographic that drives much of the housing demand -- have kept many first time buyers out of the market.

Related: What will your monthly mortgage payment be?

But things are looking up, with employment among 25- to 34-year olds reaching its highest level since the end of 2008, the Bureau of Labor reported.

Young people with jobs and freshly increased wages won't immediately come rushing into the housing market, however. They will have to save up for down payments and manage their student loan debt first, said Jed Kolko, chief economist at Trulia.

Another big hurdle: incomes.

"They need to see that growth in their income is substantial before they take on that financial obligation, which is the largest they'll probably have in their life," said Doug Duncan, chief economist at Fannie Mae.

Related: American dream homes -- what you'll pay in 10 cities

Home prices have continued to rise faster than wages, and young adult employment remains below the levels that group enjoyed before the recession struck.

Duncan predicts that Millennials won't be a primary driving force for the housing market for another four or five years.

Meanwhile, mortgage rates are expected to increase in 2015, and affordability will likely remain a challenge for many buyers.

"There are still obstacles to home ownership," said Kolko. "There are many more jobs reports to get back to normal, but this is a step in the right direction."

CNNMoney (New York) February 6, 2015: 8:11 PM ET

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