Young people over the past few decades have expected to move out of their family home once they are ready to attend college or gain full-time employment. This may no longer be the case, as increasing numbers of new adults across the US are choosing to live at home with their parents as a way to save money. The housing market goes through different stages; currently, renting and buying property is proving tough for many people, especially those who are just getting started.
People have found it harder to buy a house since the 2008 financial crisis. The US had about two million renter households just before the crisis. That figure surged to more than 14 million in 2016. According to the 2018 US Census Bureau data, homeownership by families declined by around 3.6 million, but the number of families choosing to rent rose by 1.9 million.
Although more families still own homes instead of renting, the trend suggests that renting could eventually overtake homeownership.
What happened? Well, it is not because the American Dream has evolved from owning to renting. The overall housing market is driving these changes and preventing young people from purchasing even the most basic of starter homes in Oregon, Florida, or Illinois. From a huge shortage of entry-level homes to skyrocketing real estate prices, younger people cannot get their foot in the door. As a result, a common living situation 80 years ago has become prevalent again.
Generational living has now become a normal thing in the US, after disappearing from American society for several decades. This is when multiple generations – grandparents, parents, and children – live in the same household for health and financial reasons. The Pew Research Center estimates that a record 64 million Americans (about one-fifth) live in generational households. The lowest level was in 1980 at just 12%.
For many families, it makes sense to live under the same roof. A grandparent may own a home, a mother or father cannot afford to buy a home, and an adult child does not have enough money to rent an apartment in addition to covering school expenses. It might just make more sense for everyone to share the same home.
Many young Americans who have finished high school and are on their way to college or a new job may want to be on their own and live by their own rules. Unfortunately, the current state of the rental market may prevent that from happening. For many, staying with mom and dad – or grandma and grandpa – may be the only route to take.
My Life to Live
For years, young Americans have dreamed of fleeing the nest, living in a bachelor pad, and staying up late into the night eating cookies and reading comic books. Unfortunately, the housing market has forced this generation of young Americans to rethink this plan. Instead, to save money and to concentrate on getting an education and/or finding a job, more and more young people need to continue to live at home for another few years. It might not be ideal for rebellious or independent youth, but it may be the only way to survive and thrive in today’s world.
Stay tuned for Part Two to gain practical insight on what it’s like to enter the rental market.