The first quarter of 2014 struggled to compete with 2013’s strong start, with housing starts down, news home sales lower and existing home sales off. But one of the biggest factors prohibiting housing growth could start to change: millennials.
According to a new report from the Joint Center for Housing Studies of Harvard University, “Much of the sluggishness of household growth in fact relates to lower headship rates among this age group—driven not only by a slowdown in immigration but also by the increasing share that continue to live in their parents’ homes.”
About 2.1 million more adults in their 20s and 300,000 more adults in their 30s lived with their parents in 2013 than if the shares living at home had remained at 2007 levels, the report found.
This could slowly start to change as the fed hopes that the housing market recovery would accelerate once employment growth revived and younger adults were able to get jobs.
But it has yet to happen, despite more millennials getting jobs.
Looking at historical trends, the share of adults living with their parents drops sharply after age 24 and continues to fall to 6% by the mid- to late 30s.
“Regardless of the economic setbacks they may have experienced, today’s 20–29 year olds are still likely to follow the same pattern,” the report said.