This is the first post in a three-part series about how millennials are changing home dynamics and how families can adapt to their needs.
Last week, the Pew Research Center released findings about broad shifts in living arrangements among people in the 18- to 34-year-old age range as compared to recent generations. In response, the internet has been quick to make assumptions about why more young people are living at home than at any time since 1940. However, the truth about these trends is more complicated and nuanced than some make it seem.
Let’s examine the issue one step at a time to discover why millennials are really living at home.
Who are Millennials?
As a whole, millennials are painted as grown-up versions of Ferris Bueller—affluent, self entitled white “kids” who are more inclined to take a day off than to follow through with their educational or professional commitments. That image is far from reality. Sure, five out of the six Kardashians are millennials (if you include Rob and the Jenner sisters), but so are Mark Zuckerberg, Adele, and Malala Yousafzai.
In fact, a recent news release from the Bureau of Labor Statistics demonstrates that the 80 million people in the U.S. born between the early 1980s and late 1990s are a group diverse in race, education level, proximity to urban centers, and socioeconomic levels. The average 29-year-old has completed some college (but did not graduate), is either married or living with a partner, and is more likely to be moving out of urban cores than into them because of low wages and urban housing shortages. These factors and more have contributed to the growing trend of millennials staying at home, or moving back in, with their parents.
What does Pew Research Show?
The big headline in Pew’s latest research shows that more young people are living at home than at any time since 1940. Also a period following a long economic downturn, a full 35% of young people in 1940 lived at home with their parents. Those numbers dropped through the 1960s, when “married or cohabitating” rates were at their highest, and have begun steadily increasing since 2000.
On the surface, this seems pretty straight forward: Millennials are putting off marriage and accruing student loan debt, so many are staying in their parents’ homes longer or returning home after school. However, what was most noticeable among the data was that living arrangement is most strongly correlated to educational attainment, race, and ethnicity.
Among young people without a college education, the rates of those living at home began to exceed those who were not as early as 2008. African-Americans and Hispanics are also more likely to live at home with mom and dad than their white counterparts. Men are also more likely to live with parents than women, largely because of changes in employment levels and adjusted earnings over recent decades, with unemployed men making up the largest share.
What are the Implications of this on Real Estate?
A number of surveys over recent years demonstrate that millennials value home ownership, but many do not consider themselves financially capable of buying.
While the economy is currently affecting millennials’ purchasing power and living arrangements, it’s inevitable that millennials’ actions will also reverberate back through the real estate market for years to come. The country is already seeing dips in home ownership by as much as 11.1% for young buyers as compared to 2001. The potential slow in sales has heavy implications for the real estate market as a whole.
Nonetheless, there are many things families can do to accommodate the needs of millennials living at home, as well as things young people can do to better prepare themselves for home ownership.
Read the second post of the series here: “3 Things You Need to Survive Living with Your Adult Children.” Part 3 addresses tips for first-time home buyers.
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