Why Don’t Adult Offspring Move Out?
The housing recovery continues to move in slow motion, and the trend of adult children continuing to live in their parent's homes has been called one of the reasons. A new study looks at some of the reasons why young people are remaining in the nest, but also notes that when they finally do move out, they may not give the market the boost some have anticipated.
One of the study's biggest surprises? That the parents of these young adults aren't necessarily eager for them to strike out on their own.
Not surprisingly, most young adults who live with their parents do so for financial reasons, according to the analysis of the latest Fannie Mae National Housing Survey. The main reason, cited by 29 percent of adult children 18-34 who live with their parents, was to save money while attending school. Another 23 percent said they couldn't afford a place of their own, while 8 percent were saving for the future. Nine percent said they simply prefer living with their parents.
The poll found significant differences between the youngest adult children living with their parents, those ages 18-22, and those ages 23-36. The latter is the group commonly regarded as prime candidates for first-time home ownership, so their answers are most relevant to expectations for the housing market.
Younger group mostly seeking education
It's also worth noting that the 18-22 year-old group made up more than half of all young adults living with their parents. Among that group, 40 percent said they were doing so in order to continue their education - the same percentage that said they were presently unemployed. Only 14 percent of the older group cited education as a primary reason.
Among the older group, 24 percent said they couldn't afford to live on their own - only a percentage point higher than the younger cohort, but still the #1 reason for that group. Sixteen percent said they were living at home because they were not yet married - much higher than the younger group, for whom only 6 percent gave that reply. Eleven percent of the older cohort said they were saving for the future.
Just under half of the 23-36 year-old group - 48 percent - said they were employed and working full-time. Just over one-quarter - 26 percent - were unemployed, while 23 percent were working part-time.
Parents don't seem to mind
By a significant majority, the parents of these adult children had few objections to their offspring continuing to live with them. More than two-thirds - 68 percent - said that they prefer to have their children live with them, although those numbers changed as they grew older. Thirty percent of parents of the older group said they would prefer their children find other living arrangements, compared to only 20 percent with at-home children in the 18-22 year-old group.
Asked about what they expect to happen when their children finally do get a place of their own, 34 percent of the parents said they think their children will buy a home, while 66 percent expect them to become renters. That almost exactly matches the breakdown of homeowners-to-renters in the age 34-and-younger in the 2012 American Community Survey, meaning that even when these young people leave the nest, they may not have much impact on the home ownership rate.