Over the past decade, the number of millennials still living at their parents’ or grandparents’ homes has risen steadily, as new data has determined.
The trend started just before the Great Recession of 2008, but actually picked up pace during the downturn and the recovery.
Data from real estate analytics company Trulia discovered that almost 40 percent of millennials are living with relatives, marking the highest point in 75 years. In fact, the only time in U.S. history the share has been higher was 1940, during a time the economy was picking itself back up following the Great Depression, as well as the year prior when the U.S. entered World War II.
It seems the current data is tied to two major facts, including society shifts and economic setbacks, as well as low wages, student debt, and rents that have been rapidly increasing.
“Even though unemployment rates have decreased and the economy is picking up, we know wages are stagnant, so this will impact this generation of homebuyers,” explained Cheryl Young, senior economist at Trulia. “The millennials are getting married later and having fewer children, and that’s particular to this generation.”
Earlier this year, the Pew Research Center revealed that 32.1 percent of 18-to 34-year-olds lived with their parents in 2014, which surpassed the 31.6 percent of millennials living with a partner or spouse in their own household.
It’s no secret the last decade has proven difficult to millennials. Coming of age during a time of economic downfall, they were met with a time of incredulous unemployment rates and more cautious credit markets. And while it proved more difficult to qualify for a mortgage after the recession, millennials were taking on an increasing amount of student debt.
Housing prices have bounced back since the recession, while rent rates have gone through the roof due to higher housing prices and the demand for rental apartments skyrocketing.
“For most people who take the traditional trajectory, you might rent, then you are ready to buy a home,” Young noted. “But if people are living with relatives, it means they aren’t even able to rent. The rental prices are very high in some urban areas, and those are barriers for people to move out.”
And to put icing on the cake, millennials aren’t even earning as much as Generation X did at the same age. In 2014, it was reported that the median income for millennial households was $61,003, compared to Gen Xers inflation-adjusted $63,365 in 1998.
According to Harvard’s Joint Center for Housing Studies, homeownership rates for Americans in their 20s and 30s have fallen dramatically, and are expected to only continue in a downward spiral over the next few years, with even more young graduates deferring loan payments, of which the grace periods are nearing an end.
Just over 35 percent of Americans under the age of 35 actually own their own homes. This is a decline of 8 percentage points from 2004, showing the reality the recession, student loans, and more have had on millennials.
Young says there are many millennials still purchasing homes, however. Their generation is the largest of all age groups at the current time, and therefore make up the largest portion of first-time home buyers, despite the trend of living at home. Millennials are also faced with the challenge of a lack of starter homes, however.
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It’s a much different world than the baby boomers experienced. In fact, when they came of age in the 1970s, a mere 25 percent of their group lived at home.
The living-at-home trend has been followed closely by the real estate industry, because millennials are changing the workings of the housing market.
What Does It Mean For You?
If you are a millennial, or any generation really, this might give us another chance to reflect and realize we can’t compare ourselves to others and how they lived their lives. Times are different at each moment and there’s no set way to live life. You are not “behind” or “doing it wrong”, you’re simply having a different experience.
Not just that, why do we try to define ourselves and our ‘success’ as how much money we have, what car we have or what house we have? We do it because that’s how we’ve been told to define success, it’s an illusion, a belief a game. It won’t make up truly happy.
So if you find yourself struggling, comparing yourself to others or down and out about your situation no matter what age, remember who you truly are and what it truly means to be you. Don’t focus on trying to fit a certain mould of success. You’ll find it might take a moment to eve truly become more self aware about who YOU are once you begin looking beyond these surface level ideas of who you think you are.
In this new film called Prosperity, you can learn the ways in which companies are changing the game in order to change our world. CE's founder Joe Martino is in this film talking about CE's business practices.