Starting some time in 2006, the number of 18-34 year olds living with their parents started to rise. And it kept on climbing following the onset of the financial crisis. Only recently has it begun to dip.
In fact, a third of 18-34 year olds now live with their parents, according to Deutsche Bank’s Torsten Slok. And this means there is a significant pent-up demand for housing.
Deutsche Bank has previously been argued that shared households represent pent-up demand, and that this pent up demand could eventually prove to be bullish for the housing market when it is unleashed.
Slok now specifies: If individuals per household returns to levels seen in the 2000-2003 era, more than 4 million new households could be formed.
Unfortunately, Slok doesn’t state what the likelihood is that this will occur. But it does give us an idea of the slack we’re facing in the housing market.
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