Millennials still crashing with parents despite strong economy


An increasing share of American millennials are living with mom and dad instead of starting their own homes, even as the economy has recovered since the great recession, according to a new analysis of federal data by the National Association of Home Builders.

Access to home-cooked meals and family photo ops are probably not the main drivers for 25- to 34-year-olds staying in the nest despite low unemployment rates and modest pay gains. Instead, ever-increasing housing costs and personal debt are largely to blame for the missing millennial-led homes, economists say.

The median price for a new home in the U.S. jumped nearly 40 percent from $232,100 in 2008 to $323,100 last year, more than double the general price inflation rate of 17 percent over the same period. During that time, median weekly earnings for 25- to 34-year-olds only grew 19 percent from $666 in 2008 to $794 in 2018, according to federal data.

Get expert advice and tools to help you make better financial decisions. Sign up for the Bankrate newsletter today.

The 25- to 34-year-old age group traditionally provides a large chunk of America’s first-time homebuyers, says Natalia Siniavskaia, assistant vice president for housing policy research at the National Association of Home Builders.

But Siniavskaia found just 40 percent of those ages 25 to 34 led their own household in 2016, and that number has been dropping steadily from 46 percent in 2000. The missing 6 percentage points equates to roughly 2.4 million would-be households, according to an estimate released this month.

The portion of young adults who live with mom and dad or other relatives rose from 15.3 percent in 2000 to 26.3 percent in 2016, according to NAHB.

“This story is quite different in different states,” Siniavskaia says. “There are states where headship rates for this age group are north of 50 percent, such as North Dakota and Iowa. And there are states like California and Florida where young adults are much more likely to live with parents.”

States with more expensive housing markets have a smaller share of 25- to 34-year-olds leading homes. California, New Jersey, Florida, New York and Hawaii are consistently among the least affordable places to live and have the lowest headship rates, some of which are well below 37 percent, according to NAHB.

Less-costly states including North Dakota, South Dakota, Iowa and Nebraska register the highest headship rates, ranging between 48 percent and 49 percent.



Source link




Leave a Reply

Your email address will not be published. Required fields are marked *