Robert Frost said that home is the place where, when you have to go there, they have to take you in. Given the ongoing state of the economy, a lot of folks have have opted to go home. Retired parents whose investments have taken a hit have moved in with kids, unemployed young adults have moved in with parents, laid off workers have moved in with siblings, and all sorts of other combinations. According to Lawrence Yun, chief economist for the National Association of Realtors, that means that demand for new housing could skyrocket at any time. He said in yesterday’s Existing Home Sales report:
The great suppression in household formation during the past four years was unsustainable and pent-up demand could burst forth from the improving economy.
According to the Washington Times however, young adults, at least, are becoming more comfortable with extended family under one roof: [Hat tip Mr. Twist]
It’s been confirmed: They are down with living in the basement.
About 30 percent of young Americans age 25 to 34 who once left their family homes have moved back in, says a report released Thursday by the Pew Research Center.
Not only is there no stigma attached to being part of the “boomerang generation,” but both parents and young adults seem to be OK with the arrangements, said Kim Parker, author of the Pew report.
Just 24 percent of the young adults said moving home was “bad” for their relationships with their parents; another quarter said it was “good” for everyone, while the rest of the young adults said moving home made no difference in their family relationships.
The trend of young adults returning to their family homes had been growing steadily since the 1980s, and surged in 2007, when the Great Recession upended millions of jobs and housing situations, the Pew report says.
Even with job formation ticking up slightly, wages remain suppressed, and many families can use some extra income:
This boomeranging often eases financial concerns for everyone, Ms. Parker said. High numbers of young adults are paying for groceries and doing chores, and 48 percent pay rent – which in turn is welcomed by about 40 percent of their parents, the report says. In return, the young adults benefit from living with others while they pursue good jobs or education.
It is not uncommon in many cultures for extended families to share a home. [And it wasn’t uncommon in the U.S. not so long ago either.] Certainly there are folks who will jump at the chance to have their own place once they have the money, but many, especially older Americans, may not be willing or able to make that choice. Given the pace of the “recovery” it seems unlikely that there will be an “explosion” of people leaving their extended family homes. Those that do move out to a place of their own will leave in a trickle, and not with a bang.