Trulia: Stay-at-Home ‘Nothing New’
It’s an oft-heard question in the real estate finance industry: When are the Millennials going to move out of their parents’ homes and start buying their own? But research from Trulia, San Francisco, suggests that Millennials have been no different from previous generations.
In a recent blog, Trulia said the stay-at-home Millennial narrative is “overblown.” Trulia examined a cohort of young adults ages 28-32–those old enough to be out of school, but still fairly fresh in the labor market–and compared them to older adults in their prime working-age, 33-55, at various times throughout the past 55 years. The results? Not much.
“When it came to homeownership, employment and income, millennials as a group are worse off in raw absolute numbers,” Trulia said. “But in comparing how young adults fare versus older adults, the gap in success has remained the same throughout time. This indicates that many myths about millennials are unfounded. When members of any generation become young adults, they struggle in the same way young adults struggle today.”
Where millennials do diverge, Trulia said the differences seem to come from trends that started long before millennials began reaching adulthood.
Highlights of the Trulia findings:
–Millennials just as likely to live with their parents as Gen Xers: As of 2016, 14.5% of millennials ages 28-32 lived with their parents or grandparents compared to 5.5% of those 33–55. That is, older millennials were 2.7 times more likely to live at home than older people still under age 55. In 1999 Gen Xers as young adults were 2.2 times as likely to live with mom and dad.
–Young adult baby boomers were more likely to live with their parents: By comparison, the last time this rate was as high as 2.7 was in 1982 when those in the middle of the baby boom generation were 28-32 year olds. They were 2.8 times more likely to live at home with their parents or grandparents than 33 through 55 year olds. The low of the past 55 years occurred in 1964, when 28-32 year olds (the silent generation) were only 1.8 times more likely to live at home than their older peers.
–No matter the era, recessions hit young adults hardest: In bad economic times, young adults tends to lose jobs and live at home at higher rates.
–In what ways are millennials actually struggling? 28-32 year olds in 2016 who didn’t live with their folks, owned homes at just 61.9% the rate of their older peers, or a little more than half the rate. This is the lowest rate of homeownership since 1975. Young adults are increasingly putting off home buying as many have delayed marriage and having kids.
–Philadelphia is where Millennials are #winning at adulting: As of 2015, millennials are more likely to own homes, make more money and have jobs than their older peers in places such as Philadelphia, Grand Rapids, Mich., Omaha, Neb., and New Orleans. Where they are being left in the dust is in Lake-Kenosha Counties, Ill.-Wis., Newark, N.J., Silver Spring, Md., and Fairfield County, Conn.
Millennials who were 28 to 32 during 2015 and living in Philadelphia were 43.0% more likely to have a college degree than their older peers. “This may help explain why they earned 78.8 cents for every dollar earned by those 33 to 55, which is a higher amount than in any of the other largest metros,” Trulia said.
San Francisco and Cape Coral, Fla., are the only two metros that have lower unemployment rates for 28-32 year olds than for 33-55 year olds. In San Francisco though, the younger cohort is only 46.9% as likely to own their home as the older cohort, which is the largest gap of any metro area.
“The big takeaway from this study is that it is important to distinguish between what young people typically do and what older or younger adults seem to be doing at unusual rates,” Trulia said. “Many of narratives surround the current state of millennials are being made outside the context of what every young adult does at unusually high or low rates and regardless of where the long-term trends have been pointing for decades.”
