2.4 Million Millennial-led Households are Missing
Movin’ ain’t easy, especially for today’s young adults trying to get into a place of their own.
In fact, just 40% of those ages 25 to 34 led their own household in 2016, and that number has been dropping steadily since 2000 (46%). According to NAHB analysis by economistthat missing 6% equates to roughly 2.4 million would-be households.
While all age groups recorded continuous declines of headship rates between 2000 and 2016, none saw a faster drop than the 25-to-34-year-olds — once the primary driver behind the big housing boom of the post-World War II era.
Affordability is the big issue, with the high costs of living, escalating rental rates and rising home prices — factors that impact people of all ages, but might seem especially daunting to younger generations with typically fewer resources and lower salaries.
As a result, young adult house sharing has risen significantly: The portion of young adults who choose to live with their parents or other relatives rose from 15.3% in 2000 to 26.3% in 2016. Additionally, the percent of those who live with roommates (non-relatives) jumped from 5.1% in 2000 to 7.5% in 2016.
A clear trend emerges when comparing household formations — or lack thereof — across the country: States with the more expensive housing markets have the lowest headship rates among 25-to-34-year-olds. California, New Jersey, Florida, New York and Hawaii are consistently among the least affordable places to live and have the lowest headship rates, some of which are well below 37%.
On the other end of the affordability scale, states such as North and South Dakota, Iowa and Nebraska register the highest headship rates, ranging between 48%-49%.
Source: NAHB Now