Authored by Mike Shedlock via MishTalk.com,
Due to waning housing affordability, a growing number of Americans continue to live with their parents into adulthood.
Living With Parents
Chris Salviati at Apartment List notes More young adults now live with their parents than at any point since 1940
In 1970, just 7 percent of 25 to 35 year-olds lived in their parents’ homes, but as of 2022, that share has more than doubled to 17 percent.
When viewed over a long horizon, the share of young adults who live with their parents1 exhibits a U-shaped trend. In 1940, with the Great Depression still close in the rearview mirror, 17 percent of 25 to 35 year-olds lived at home. But in the ensuing decades, the postwar economic boom and rapid buildup of America’s suburbs enabled more young people to strike out on their own. From 1940 to 1960, the share of young adults living at home fell by more than half to 8 percent, and remained fairly stable at that level through 1980.
Living with parents became slightly more common from 1980 to 2000, and from 2000 to today that growth has picked up even more steam. As of 2022 (the most recent Census data currently available) 17 percent of America’s young adults live with their parents, a rate that is more than double what it was during the low period from 1960 through 1980. The likelihood of 25 to 35 year-olds living with their parents has returned to a level not seen since 1940.
Another way of thinking about this trend is to make the comparison across generational cohorts. The chart below shows the percentage of adults who live with their parents at each age from 25 to 35, broken out by generation. As expected, we see living with parents become less common with age (i.e., it is more likely at age 25 than at age 35). More importantly, we also see the curves gradually shift up for each consecutive generation, as living with parents has become increasingly common over the course the past half-century.
Can’t afford to Move Out
Among young adults who live at home, the share who could comfortably afford to live independently has fallen dramatically. For the purpose of this analysis, we assume that an individual was in a financial position to move out of their parents’ home if they could have paid the median rent for studio and 1-bedroom apartments in the county where they lived without spending more than 30 percent of their individual income on rent.
Even College Grads Increasingly Live with Parents
In 2022, 12 percent of 25 to 35 year-olds with a four-year degree or higher lived with their parents, up from 6 percent in 1980.
Not Surprising
None of this is the least bit surprising. However it’s good to see some numbers even if they are stale.
I suspect we can add two to three percentage points to the total for 2024. If so, that would top the percentage of 1940.
Rent Up at Least 0.4 Percent for 33 Straight Months
The string of 33 consecutive months of rent rising 0.4 percent or more is finally broken.
CPI data from the BLS, chart by Mish
On July 11, I reported CPI Declines in June, Rent Finally Moderates, Food Away From Home Is a Problem
Hooray. Rent only rose 0.3 percent in June. I suspect that will be the top for some time.
But look at the damage.
Rent is up 23.6 percent since the start of the Covid pandemic.
CPI Index Levels Rent vs Hourly Wages
Rent vs Wages Key Points
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In the last year, rent is up 5.0 percent. Wages rose 4.3 percent.
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In the prior year, rent rose 8.4 percent. Wages rose 5.1 percent.
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Compared to two years ago rent is up 13.9 percent. Wages are up 9.6 percent.
Personal Income Revised Lower for April and May
On July 26, I noted Personal Income Revised Lower for April and May, Spending Higher in May
The BEA revised personal income lower in April and May. Get used to negative revisions because more are coming.
July 18: Continued Unemployment Claims Jump to the Highest Level Since Nov 2021
After stabilizing for about a year, continued unemployment claims have surged in the last two months.
This is hard data, and it ties in with the second-quarter recession theory.
“All Hell Breaks Loose”
Also consider “All Hell Breaks Loose” In the Next Few Months as Recession Bites
Two of us are still adamant that a recession has started. The other is Danielle DiMartino Booth, in her best video yet. Please take a look.
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