New reports shed light on two striking trends in the U.S. housing markets that seem to contradict each other.
A new report from Goldman Sachs reflects similar findings from the Pew Research Center released last month: The economic recovery has not pushed more young adults out of their parents’ homes and into their own households.
Actually, quite the opposite. Since the start of the recovery (roughly 2010), the share of 18–34 year-olds who are living at home has increased.
About a third of Millennials are living with their folks. This percentage stopped rising during the second half of 2014, but it hasn’t shown any substantial shift. Despite the recovery, they’re still living at home.
These findings seem to run contrary to a separate trend in American housing: The number of new households in the U.S. is rising steadily, according to Census data. So who’s creating the new households?
Jed Kolko, an economist, offers a possible explanation. In a report for the University of California-Berkeley’s Terner Center for Housing Innovation, he explains that older adults are behind the growth in new households.
Kolko: “Despite expectations that Millennials are the force behind household formation, older adults are driving household formation. Strikingly, age groups younger than 55 collectively had negative household formation between 2014 and 2015, while 65–74 year-olds accounted for more than two thirds (860,000) of overall household formation.”
See chart below. Read the full article from CityLab.