Older Kids Are Refusing to Flee the Nest
Nearly 40 percent of young Americans lived under the same roof with their parents or relatives in 2015. That is the largest percentage since 1940, Census data shows.
The share of young Americans ages 18 to 34 who are living with their parents or other family members has been increasing since 2005. Prior to the recession, about one in three young Americans were living with family.
Typically, as the economy improves, the number of younger Americans living with relatives declines. But that has not been the case in the latest economic cycle as millennials have largely stayed put.
In 1940, following the Great Depression, young Americans living with their parents reached a high of 40.9 percent. The percentage of young adults living with relatives then plunged to 24 percent in 1960.
The millennial generation is the largest in U.S. history and the housing market is anxiously awaiting their move in real estate. But faced with rising rents and tough underwriting standards for credit may be blocking many younger Americans from venturing out on their own, real estate experts say.
The Harvard Joint Center for Housing Studies says that household formation is closely tied with housing affordability and income. Forty percent of young adults ages 25 to 34 with earnings of less than $25,000 headed their own household. For those who earn between $25,000 to $50,000, the percentage rises to 50 percent. Fifty-eight percent of young adults with incomes higher than $50,000 are heading up households.
Studies also show that younger Americans are delaying getting married and having children later in life than previous generations. That also may be preventing them from stepping out on their own.
Regardless, economists are optimistic. They are predicting that eventually millennials will leave their parents’ homes. Millennials are expected to more than double their current number of households through 2025.
Source: “Percentage of Americans Living With Parents Rises to 75-Year High,” The Wall Street Journal (Dec. 21, 2016) [Log-in required.]