Jed Kolko, chief economist at the real estate information company Trulia, estimates that by last year there were 2.3 million of these“missing” households — households that would exist if historicalpatterns had held, but instead are nowhere to be found.
Why the missing households? To a large degree, they can be explained by young people choosing — or being forced by circumstance — to remain at home longer than they have in previous generations.
Before the recession, 27 percent of 18-to-34-year-olds lived with their parents. Now that share is 31 percent. That is surely attributable in part to the lingering effects of a downturn that struck young adults particularly hard. Only 62.9 percent of 20-to-24-year-olds had a job in March, according to Labor Department data, down about 7 percentage points from the spring of 2007. The overall employment rate has fallen by only 4.4 percentage points.
But while the weak job market for young adults is an important element of the story, it’s not the only one. Even young people who have jobs are more often living with their parents: Among employed 25-to-34-year-olds, the rate has risen to 25 percent in 2013 from 22 percent in 2007.
“The younger generations do not seem to have a significant lower preference for homeownership,” said David Crowe, chief economist of the National Association of Home Builders, citing surveys. “They just can’t do it now. They stayed home because they couldn’t get a job or couldn’t get a good enough job to live independently.”
via The Housing Market Is Still Holding Back the Economy. Here’s Why. – NYTimes.com.