Question
Why do so many young adults live with their parents these days in the United States?
Answer
I believe it is the last 30 years that has been anomalous, not the current trend. Home ownership has not been as universal at any other time or place in history. For the privileged few in the rest of the world, it was something you achieved late in life, if at all, after decades of renting or living with family.
America has been anomalous not only in the extent of home ownership, but in how young people are when they expect to own a home.
I think that this anomaly is now being corrected. This is partly because America has become a service economy, and service economies are more urban economies than the farming economy in which the dream of home ownership was born, and seemed obviously available given the vastness of America.
For the service economy, the vastness of America is somewhat meaningless, since there is no point in being in the middle of rural Nebraska if you want to participate effectively. Which means American is now more bicoastal, urban and mega-urban that it has ever been.The interior is hollowing out.
This means the population centers are starting to follow Old World real-estate economics.
The recession is a shock that helped start this return to balance, as is the abundance of 'baby boomlet' Gen Y'ers who are flooding the labor market. But those proximal reasons work together with a larger historical trend.
This is not something that will get corrected quickly. Even when young people return to higher employment levels, they won't return to their historical independent living levels (let alone early home ownership levels).
They may move out of rent-free parental homes, but they still won't be afford independent middle-class lifestyles. You only need to compare typical rents for decent apartments in places like DC or San Francisco to understand this. There is no way you can afford to live in places like that at the sort of income levels that you can manage if you are a 22-something liberal arts grad. It is barely manageable even for people with professional and graduate professional degrees.
America has been anomalous not only in the extent of home ownership, but in how young people are when they expect to own a home.
I think that this anomaly is now being corrected. This is partly because America has become a service economy, and service economies are more urban economies than the farming economy in which the dream of home ownership was born, and seemed obviously available given the vastness of America.
For the service economy, the vastness of America is somewhat meaningless, since there is no point in being in the middle of rural Nebraska if you want to participate effectively. Which means American is now more bicoastal, urban and mega-urban that it has ever been.The interior is hollowing out.
This means the population centers are starting to follow Old World real-estate economics.
The recession is a shock that helped start this return to balance, as is the abundance of 'baby boomlet' Gen Y'ers who are flooding the labor market. But those proximal reasons work together with a larger historical trend.
This is not something that will get corrected quickly. Even when young people return to higher employment levels, they won't return to their historical independent living levels (let alone early home ownership levels).
They may move out of rent-free parental homes, but they still won't be afford independent middle-class lifestyles. You only need to compare typical rents for decent apartments in places like DC or San Francisco to understand this. There is no way you can afford to live in places like that at the sort of income levels that you can manage if you are a 22-something liberal arts grad. It is barely manageable even for people with professional and graduate professional degrees.