A new analysis conducted by real estate tracker Trulia has reported that 40% of young adults age 34 and under are living with family. A rate not seen since before World War II.
The number has risen considerably since 2005 when 1 in 3 young adults lived “at home.” According to the Wall Street Journal:
The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the economy improved.
The result is that there is far less demand for housing than would be expected for the millennial generation, now the largest in U.S. history. The number of adults under age 30 has increased by 5 million over the last decade, but the number of households for that age group grew by just 200,000 over the same period, according to the Harvard Joint Center for Housing Studies.
Analysts point to rising rents in many cities and tough mortgage-lending standards as the culprit, making it difficult for younger Americans to strike out on their own.
The long-term implications of Millennial trends in setting up households, home-buying and marriage and family have yet to be played out, but homebuilders are keeping an eye on their trends.
Of course, this generational stasis has implications for society as well. Terms like “adulting” have become a part of the lexicon and whether or not Millennials are simply doing the pragmatic thing and living with family in order to pay off debt and/or build adequate savings to establish a household, or just being lazy has yet to be determined.
The last generation to live with family at rates higher than Millennials were those under age 34 in 1940. At 40.9 percent, due to the economic factors of the Great Depression, that generation and their children went on to give birth to the Baby Boom.
This is one of those instances where literally time will tell and history shows not all is doom and gloom.