The Percentage of Young Adults Living With Their Parents Reaches An All-Time-High
40% of young people have made their way back to the nest, which is the largest percentage since 1940, reports the Wall Street Journal.
Those between the ages of 18 and 24 living again with their parents, siblings or other relatives has been on a significant rise since 2005. This trend was only accelerated after the Great Recession of 2008. In 2005, only one in three young adults returned to live at mom and dad’s house.
As the economy improves, usually this number decreases. But apparently the slow recovering economy has had a major impact on the financials of millennials.
There is now less of a demand for housing for this segment of the population, which will soon have the greatest buying power. Specifically, the number of households only increased by 200,000, even though the number of adults under 30 has spiked to 5 million since 2005, according to Harvard Joint Center for Housing Studies.
Besides the slow recovering economy, rents and tough mortgage lending standards have also attributed to why Millennials are having difficulty leaving the nest for good.
“Even though unemployment rates have decreased and the economy is picking up, we know wages are stagnant, so this will impact this generation of homebuyers,” said Cheryl Young, senior economist at Trulia to CBS News. “The millennials are getting married later and having fewer children, and that’s particular to this generation.”
32.1% of Millennials lived at home in 2014, which was more than the 31.6% living on their own.
“The last decade hasn’t been kind to America’s youngest generation of adults. They came of age just as the economy fell into a recession, which caused higher unemployment rates and tighter credit markets. While it was tougher to qualify for a mortgage following the recession, millennials were also taking on increasing amounts of student debt,” writes CBS News. “The typical undergraduate student borrower had $30,100 in student loan debt in 2016, a surge of 53 percent in just one decade, according to the Institute of College Access and Success.”
Not to mention, the millennial generation earns less than Generation X did at their age.
According to Pew, Millennial households earned a median income of $61,003 in 2014, while Gen Xers earned $63,365 (a number that has been inflation-adjusted) in 1998.
A little over 35% of Americans under 35 own their own homes, which is an 8% decline from 2004, reports Pew.
Millennials are still the age group purchasing the most first-time homes, but this is due to the group’s large numbers.
Author’s note: Hopefully with Trump in office, the economy will get a much needed boost and less housing regulations will encourage Millennials to flee from the nest. If this percentage can decrease drastically, think of how the housing market will skyrocket. It’s time for change.
Editor’s note: We also need a major boost in eduction, to teach responsibility and work ethic. These two qualities seem to be in short supply.