The global financial crisis forced many unemployed millennials (those aged 18 to 34) to live at home with their parents.
This trend has been one of the forces holding back the US housing market.
But in the past few months, it that trend has been reversing and America’s young people are finally moving out!
According to data from Goldman Sachs, the percentage of 18-34-year-olds living with parents is now at the lowest level since 2011.
“The improvement in the labour market is likely to push up the headship rates of younger people,” writes Goldman Sachs’ Jan Hatzius. “Econometrically, we have found some evidence that headship rates respond to labour market changes in the under-35 population.
The “headship rates” is the ratio of one household to number of people living in that house. So if you have 5 roommates, that’s a low headship rate (1/6). And if you have 1 roommate, that’s a high headship rate (1/2).
As a result, many younger Americans simply couldn’t afford to own — or even rent — their own homes. They had no choice but to live at home with their parents.
From 2008 to 2013, the percentage of 18-35 year olds that were living at home with their parents kept rising — from nearly 26% up to nearly 32%, according to data from Goldman Sachs.
Ultimately, all that Goldman Sachs is saying is this: as the labour market improves, there are less millennials living under one roof (aka they’re moving!)
So since the labour market is continuing to improve, it looks like millennials (and parents) can finally breathe a sigh of relief.
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