To add to its long list of accomplishments, the Obama administration can now tout the fact that more young Americans are living with their parents than ever before.
It’s a record. 21.6 million young adults have not left home. That’s 36% of the millennial generation, the cohort between 18 and 31. In 2007 the number was 32%. In 2009, when the recession ended, 34% of millennials were living at home.
One reason is the cost of college loan debt. Another is unemployment. Only 63% of millennials have jobs. As we know from other studies, many of those employed young people are seriously underemployed. In 2007, 70% were gainfully employed.
How’s that recovery working out for you, young Obama voters?
MarketWatch also observes that the burden of living in a childhood bedroom is falling disproportionately on young men. The gender gap is alive and well and young men are losing out. 40% of the stay-at-home-with-mom-and-dad millennials are male. 32% are female.
This makes sense. The educational establishment has chosen to promote women’s achievement at the expense of men’s. Thus, women are more likely to attend college, are more likely to do well in their studies and are more likely to be desirable employees.
Obviously, this makes marriage an increasingly rare occurrence. In 2007, 30% of millennials were married. In 2012 the number was: 25%.
Clearly, this will have an effect on the residential real estate market. As you must know, real estate has been doing very well of late. It is in full recovery mode.
One would like to know how much of that recovery is being fueled by large pools of investment capital that have been used to buy up distressed and not-so-distressed properties, especially in weak markets. And one would like to know how much of it is being generated by foreign capital looking for a safe haven.
The future of residential real estate depends on new household creation. With young men out of work, living at home, unable to marry and to start families, fewer households are being formed.
Those who believe that residential real estate has nowhere to go but up should note this observation from MarketWatch:
And the fact that around 22.6 million young adults are still living at home also means there are fewer renters and potential buyers of first-time homes in the property market. Only 450,000 new households are being created annually versus 1.1 million before the recession, according to real-estate marketplace Trulia; 18- to 34-year-olds make up half of that demand.