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.
And Barry says he's focusing like a laser on jobs. Much like Goldfinger's laser on James Bond.
ReplyDeleteI'm confused...end of paragraph 5: 40% of the stay at home millenials are male, 32% are female...and the other 28% are? Otherwise really good article and insights, as always!
ReplyDeleteHey, why commit to anything if you don't have to? Sounds like freeloading. To the point of your other post, Stuart, accomplishment (real or imagined) is for suckers. When we're all special and we're all equal, why strive for anything?
ReplyDeleteThere is so much ado about how intelligent young people are. From this, we can conclude that intelligence is fast-diminishing in value. With no wisdom and no sacrifice for something greater than oneself, we get complacency and apathy.
The numbers quoted for Millenials living with their parents seems surprisingly low, actually. I'd have pegged it around 50%. But you are correct, the drop in new household create is enormous. Peter Pan never had to grow up, why should the Millenials?
I question how much of this trend is because of student loan debt. I find that the Millenials' parents need them around... in very needy ways. So who's the adult then? Who's the parent? When you live rent-free and don't save, it becomes the new normal, and then you're stuck in mediocrity. Is that love for your child? Alas.
We could use a shift in the culture from talking about how "intelligent" everyone is to valuing their independence and contribution to society (and I'm not talking about taxes). That would be a welcome change. Independence is a word that is conspicuously absent when chatting with the parents of Millenials.
Yet another example of robbing words of their meaning, using them instead to manipulate perception. The concept of value (a=a) is under constant assault. The corrosion of language in our culture is alarming. Superlatives don't mean anything anymore. I heard from a friend that 5% of his son's graduating class were valedictorians. Daddy-daughter dances are canceled because some girls don't have fathers in their lives and will feel excluded.
Propaganda is an excellent description. We have lowered standards so much, and we are simultaneously bombarded with never-ending excitement from the glowing box that we're left to fight boredom when they're not continuously stimulated. Yet none of this is real. None of it. When was the last time there wasn't a "Fox News Alert" on your screen? The TSA threat level is always orange. It's this low hum of nonsense.
I wouldn't describe Obama as "smart" or "accomplished" at all. In fact, I find that laughable. I describe Obama as "cool," and not in the Arthur Fonzarelli style, either. He's just robotic. Nothing seems to phase him except Republicans. And the press just coos over him, hanging on his every word, believing all the candy they get while he is constantly campaigning. He's not "smart." He is rarely challenged about what he says, he just keeps speaking.
Goldfinger's laser... yep, that's it.
Tip
From MarketWatch:
ReplyDeleteMillions of young Americans are living at home, according to a Pew Research Center analysis of U.S. Census Bureau data. The number of “millennials” -- adults aged 18 to 31-- living at home rose to 36% last year. That represented the highest percentage in the last four decades, and a significant increase from 32% just five years earlier. In 2012, 56% of adults aged 18 to 24 lived in their parental home, Pew found, as did 16% of adults aged 25 to 31. However, millennial males (40%) were significantly more likely than millennial females (32%) to live with mom and dad.
Actually it may be the older generation of savers and investors that needs to "grow up." By "grow up" I mean accept the features of private property with finance that lead to an economy saturated with highly educated and under-employed populations.
ReplyDeleteIn 1957 the Soviet Union launched Sputnik. The FDIC insured banking system did not fund student loans because the structure of cash flow in the financial economy results in a loss on the student loan portfolio. The predicted loss would deplete bank capital so banks do not make a national portfolio of student loans. President Eisenhower called for the National Defense Student Loan program (NDSL) to reduce the waste of talent with a focus on math and science education. In 1965 Congress began to subsidize schools, banks, and other lenders via the Guaranteed Student Loan (GSL) programs. This is when banks really began lending to student borrowers because the profits went to banks and the default loss would transfer to the federal government as re-insurer of defaulted student loans.
When the government guarantees student loans it insures or guarantees cash flow to schools, to lenders, to secondary investors such as Sallie Mae (originally a government sponsored enterprise) but it does not guarantee cash flow to student borrowers to repay loans. When student loans default the government effectively bars a discharge in bankruptcy using laws that discrimate against students borrowers. This means the government is picking winners (educators and investors who lend money to students) and losers (the student borrowers who are statistically certain to default in a complex cash flow economy).
The investment in higher education adds economic value that does not appear on a balance sheet: we call this "human capital." Government has a role to play as President Eisenhower properly proposed. But the government should take the financial loss on the loans that cannot repay due to lack of cash flow to student borrowers as a group, rather than insure cash flow to schools and investors in student loans. Student borrowers have been used as scapegoats for the unconscious exploitation of the financial industry managers and of the older cohort in society.
In a wolf pack the Alpha pair is observed to suppress breeding in the beta members of the pack. The financial system may be imposing a wolf-pack inhibition on breeding in the younger cohort of America!
Stu-Thank you for the clarification. :) In an earlier generation adult children moving back home would have still helped with the family business(es) and helped to run the household. I bet a further study would find that the ones more likely to have returned to their parents are the ones who never performed many of the regular chores of maintaining a home.
ReplyDelete