Report: More millennials living with parents in 2015 than during recession

Dive Brief:

The Commerce Department has reported that the share of young people ages 18-34 living with their parents was 31.5% as of March 2015, up from 31.4% in 2014, The Wall Street Journal reported. That rate is higher than than during the recession, as in 2005, only 27% of that age group lived with their parents.
Many economists wrongly predicted that as the economy improved and employment went down — as they both have since the recession — young people would move out of the family home, a ritual the housing market relies on to drive future demand, according to The Journal.
Because young people are remaining at home, the significant increase in pent-up housing demand they were expected to create will not materialize soon, according to Jed Kolko, economist and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley.

Dive Insight:

Kolko doesn’t hold to the theory that children aren’t moving out because of the ups and down of the housing and job market. He said young people are staying at home longer because they’re not getting married and having children, at least not until they’re older, and single people without children are more likely to live at home.

Kolko told The Journal the trend is not likely to change any time soon. In fact, the Pew Research Center found that more young women lived with their parents in 2014 than any time since the 1940s.

"What I think it means is that the boost to housing from young adults will come more slowly than people expect," Kolko told The Journal. "The long-term demographic shifts suggest this might be the new normal, with young people living with their parents longer and more permanently delaying household formation and homeownership."

Kolko's theory adds to the several predictions for why the share of first-time homebuyers remains at its lowest level in 30 years. Several groups have previously reported that rising rents and rising home prices, combined with student loan debt, were making it difficult for young people to save money for a down payment for their own home.