At the end of the past decade, many millennials began to move in with their parents in order to save money throughout the recession and declining job market. Despite the belief that these young adults would move back to living independently once the economy improved, there are even more of them living at home than there were before according to a study by Pew Research Center. The national unemployment rate for young adults declined to 7.7% in the first four months of this year, compared to the 2010 figure of 12.4%. Despite this, the center analyzed recent census data and was able to find that 18 to 34-year-olds are less likely to be living apart from family members than they were even at the worst point of the recession, which was the worst economic downturn since the 1930’s.
These young adults were the age group hit the hardest by the Great Recession, and according to Pew senior researcher Richard Fry, “they’re not fully healed from the damages.” This could be why millennials are still choosing to live at home despite more job availability and economic improvement. In 2010, 69% of 18 to 34-year-olds were living independently, but between 2010 and this past April, the share of young people living in their parents’ homes increased from 24% to 26%. Even though the population of this age group has increased by nearly 3 million since 2007, the number of these adults starting their own households has not increased. Those owning their own households tend to be predominantly women who have obtained a bachelor’s degree or higher form of college education.
It has also been found that people who earn college degrees are more likely to secure higher paying jobs. What is even more surprising is that these college-educated adults are more likely to live with their families today than they were in 2010. Some economists believe that this could be due to higher student loan debt, forcing students to save money to pay off their loans by remaining at home. Even so, the age group of 25 to 34 without any formal education beyond high school is struggling with moving out of their parents’ homes, as they are the group facing the greatest difficulties in the job market currently.
Housing analysts have hoped that these millennials would help improve the still-restrained housing market by buying their own homes, but home ownership is currently at 63.4%, its lowest point since 1967. The real estate market is clearly bouncing back, but they are still lower than before the recession even though the overall population has grown. Experts believe that this is because not as many people are entering the market as first time buyers. Rent prices are rising, and there are fewer apartments on the market. For the remainder of adults still renting, the increased rent prices are making it harder for them to save for a down payment when the time does come for them to buy a house.
Millennials are currently experiencing higher rates of job-holding and full-time employment and are also earning more per week now than they were just after the recession. The Pew report states that these trends are not necessarily driven by labor market fortunes since college-educated young adults have experienced a strong labor market recovery than their lesser-educated counterparts. Still, the decline in independent living since the recovery began is apparent in young adults with a college education and those without one.
Young adults today are more frequently living with their parents or roommates for an extended period of time before they commit to their own independent housing. And although these options are becoming generally more acceptable culturally, the overall movement could cause a demographic shift in our society. According to Fry there’s less sorting involved, and “when the less educated do marry, they marry others who are also less educated. That’s going to impact household income and economic well-being. That’s going to affect economic outcomes."