For years, agents and analysts alike have wondered why so few Millennials are buying homes, but a new analysis of Census data has provided a remarkably straightforward answer – they’re all living at home with their parents, and at an increasing rate.
Courtesy of Trulia, which studies both Decennial Census records and Current Population Survey data, the analysis shows that nearly 40 percent of Millennials nationwide are still living at home. That is the highest share since 1940 (when the country was still climbing out of the Great Depression), and represents a 27 percent increase from 1990, when the share was just 31.1 percent.
Here is a chart that breaks down the numbers further over the decades:
|Year||Percentage of 18- to 34-year-olds living with relatives|
Millennials and homeownership
Why are so many Millennials still living with their parents? A recent study from the Federal Reserve offers a compelling, albeit haunting, explanation.
Focusing on student debt, the Fed found that for every $10,000 increase in student debt per graduate, the share of 25-year-olds living at home rose 2.9 percent. Then, looking at the historical (and historic) rise in student debt, the Fed arrived at its most eye-popping finding – in 2003, there were 25 states where 20 to 30 percent of 25-year-olds lived with their parents; by 2013, all 48 states had such rates of Millennials living at home, and for 12 states, the “parental co-residence rate,” as the Fed calls it, had exceeded 50 percent.
So although Trulia’s analysis was based on Census data, and the Fed data was centered on student loan debt, both sources arrived at the same conclusion, which is that huge swaths of the Millennial population are living at home and not buying residences of their own.