WASHINGTON–The frequent jokes about Millennials living with their parents are turning out to be true—and not so funny for the housing market.
The National Association of Home Builders has released an analysis that suggests that as many as two-million households headed by 25- to 34-year olds are missing from today's housing market. The NAHB said that if homeownership rates among that group were at 2000 levels, these missing Millennials could have been "active players" in the market.
NAHB said that "a rising number of young adults choose to stay with their parents or parents-in-law."
As of 2014, more than 20% of young adults ages 25 to 34, or 8.8 million, live in homes of their parents or parents-in-law, up from just 12% in 2000, or 4.6 million, the NAHB said. According to the report, when the youngest Baby Boomers occupied the 25- to 34-year old bracket in 1990, 12.2%, or 5.3 million lived with their parents.
Meanwhile, the U.S. Census Bureau recently reported in its Housing Vacancies and Homeownership survey (HVS) that household formation rose by 462,000 year-over-year for the fourth quarter of 2015. This was the smallest increase on record since the second quarter of 2010.