Reports Show a Delay in “Empty Nest”
Family togetherness isn’t just for Thanksgiving dinner. More young adults are now living with their parents than during the recession, according to U.S. Census data. The share of 18-34 year olds living with their parents was 31.5% as of March, 2015, up from 31.4% last year, according to a report from the Commerce Department. In 2005, just 27% of young adults lived with their parents, a number that has climbed pretty steadily since then. That the percentage at home has barely moved from last year is particularly notable because many economists expected young people to start moving out as the economy has improved and unemployment among young people has dropped significantly. The housing market is relying on those new households to drive future demand.
But the trend of young people continuing to live at home is unlikely to significantly reverse course any time soon, even as the economy improves. The rise in children living with their parents is largely related to the fact that people are marrying and having children later, not to the weak economy and housing market. Single people without children are more likely to continue living at home much later. Earlier this month, research showed that more young women were living with their parents in 2014 than any time since the 1940s. Researchers noted that young women traditionally left home to get married, which they are now doing later and later. Because young people aren’t likely to leave home in large numbers as their job prospects improve, the surge of pent-up housing demand they were expected to create will be more like a slow, steady trickle.
That helps explain why the share of first time homebuyers remains low. The boost to housing from young adults will come more slowly than people expect. The long-term demographic shifts suggest this might be the new normal, with young people living with their parents longer and more permanently delaying household formation and homeownership.
-From Wall Street Journal