Avoid The Spiral: New Data Shows a Fifth of all Millennials are Still Living With Their Parents

Posted by admin on May 31, 2019 6:23 PM

According to a new analysis of federal data, an alarming number of American millennials are still living with mom and dad even though the economy has recovered since the recent great recession. Although access to home-cooked meals is a tempting cause to stay, it is probably not the main reason that young people aged 25 to 34 are at home despite low unemployment rates. Most likely, it is the cost of living and increasing housing costs that are forcing them to keep the nest full.

The current median price for a new home in the U.S has increased by nearly 40% since 2008, which is more than double the general price inflation that has ever occurred in the same time period. Since weekly earnings for workers have only grown 19% in the same time period, it is not difficult to see why young people cannot afford to purchase a new home.

Traditionally, the 24 to 34-year-old age group would be providing the largest chunk of America’s first-time homebuyers but at this point, only 40% of those ages lead their own household and that number is steadily declining. Of course, the story varies from state to state as the cost of living and the housing market is different in each state.

So, how can millennials avoid the spiral? Unfortunately, at this time it is a matter of location. In states such as North Dakota and Iowa, houses are cheaper and the cost of living is lower so it is much more feasible to purchase a home. States such as Florida and California are much more expensive and young adults are far more likely to live with their parents. Young people are also more aware of the harsh realities of life, where Murphy can strike at any time. The employment landscape has changed since their parent’s generation, there are not as many jobs for life, and consequently millennials are less confident to commit to a 25 or 30-year mortgage repayment, even with interest rates at a historical low.

A recent study shows that some young homeowners regret dipping into their retirement fund to source the money. This is not the way to go. Sources say that young adults should wait out the process and save up enough so that when the time comes they are comfortable enough to be able to afford it on their own.

Many experts believe that a change is underway. A slight uptick in homeownership in this age group may be showing promise. As the economy is improving it should give more stability to younger adults and give them the confidence they need to leave their parents homes. Experts urge millennials not to lose hope. The white picket fence dream still rings true to many of America’s youth no matter if Mom and Dad’s house is a Beverly Hill’s mansion or a small farmhouse in southern Indiana.

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Avoid The Spiral: New Data Shows a Fifth of all Millennials are Still Living With Their Parents

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