The Number of Young Adults Living With Parents Are Rising
The number of young adults living with parents has increased steadily in the past ten years. This is a real estate trend that will continue despite the improving economy, says economists.
More young adults, ages 18 to 34-year-old, are living with their parents now than during the recession, reported the Wall Street Journal. This age group, also considered millennials, have deferred moving into their own homes in the past years. The latest data from the U.S. Census indicates that 31.5 percent of young adults are still living with their parents as of March 2015. This is slightly higher than the 31.4 percent recorded last year. However, the increase has been rising steadily over the past ten years, given 2005's level of 27 percent.
Despite the slight increase of young adults living with parents from 2014 until March 2015, experts are still foreseeing the trend to continue in the coming years. Jed Kolko, an independent economist and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley, told the Wall Street Journal that this real estate trend is unlikely to change even if the U.S. economy improves. He mentioned that young adults are opting to continue living with their parents now due to people marrying and starting their families at a later age.
Apart from this, Kolko also cited that the even if young people leave the comforts of their parents' homes due to improving job conditions, the number won't be enough to create a huge demand in the housing market. He explained, "What I think it means is that 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."
Meanwhile, for millennials who have started their own families, saving up for a home mortgage payments or a house purchase is not their top priority. Market Watch cited data from Fidelity Investment's nationwide survey which indicated that the millennial parents' top savings priority is their children's college education. This is followed by house or mortgage payments, with emergency fund savings at the third spot and retirement savings at fourth place.