The U.S. Should Have 2.4M More Households Than It Does14 Aug Realty Republic
The trend of slow-to-launch millennials staying at home with mom and dad has led to about 2.4 million fewer households forming, according to a National Association of Home Builders analysis. The rise in housing costs and personal debt are the chief factors keeping millennials at home, economists say.
The number of young adults who are living with their parents or other relatives has increased from 15.3 percent in 2000 to 26.3 percent in 2016, according to the NAHB. “This story is quite different in different states,” says Natalia Siniavskaia, assistant vice president for housing policy research at the NAHB. “There are states where headship rates for this age group are north of 50 percent, such as North Dakota and Iowa. And there are states like California and Florida where young adults are much more likely to live with parents.”
States with the priciest housing costs tend to have the lowest number of households headed by 25- to-34-year-olds. The five worst states for young adult household formations are Hawaii, New Jersey, California, Florida, and Alaska.
On the other hand, the states that have more affordable housing tend to have higher rates of young adult household formation. The five states that have some of the best homeownership rates among millennials are North Dakota, Iowa, South Dakota, Nebraska, and Kansas.
The majority of Americans recently surveyed say they believe 28 is the ideal age for purchasing their first home, according to a recent Bankrate survey. “As the economic situation continues to improve, it should give more stability and confidence to younger adults to buy their homes or leave parental homes,” Siniavskaia says. Census data may already be starting to show a change: The homeownership rate for younger adults has increased in the last year from 34.5 percent to 35.3 percent, according to federal data.
Source: “Millennials Still Crashing With Parents in Strong Economy and it Reveals Their Ambition,” Bankrate.com (Aug. 7, 2018)