Millennials Finally Flee Parents’ Homes
The pace of young adults leaving their parents’ homes is accelerating significantly, Fannie Mae’s Economic and Strategic Research Group notes in a new analysis.
Young adults in their mid- to late 20s or early 30s living with their parents fell between 2013 and 2015—a period known as the economic recovery—much more so than between 2010 and 2012, when the economy and housing market were still recovering from the Great Recession, researchers note.
Read more: New Households Favoring Homeownership
Young adults aged 24 to 25 in 2013 and 26 to 27 in 2015 residing with their parents dropped by 7.6 percentage points. On the other hand, those who passed through that same age range between 2010 and 2012 saw a decline of only 5.4 percentage points, researchers note.
“Stronger income growth and an accelerated rate of marriage are likely two primary reasons why millennials are starting to leave their parents’ homes at a faster pace,” researchers note.
Millennials in their 20s or early 30s saw their income, adjusted for inflation, grow by at least 23 percent between 2013 and 2015 when compared to 2010 and 2012. Further, their incomes are at least 81 percent greater than between 2008 and 2010.
Also, millennials in their late 20s and early 30s between 2013 and 2015 were getting married at a markedly faster rate than their predecessors did in that same age range during the recession and the recovery thereafter, Fannie Mae’s report notes.
“Millennials’ accelerated rate of departure from their parents’ homes bodes well for housing demand,” Fannie Mae’s Economic and Strategic Research Group notes in the report. “Cohort analysis shows that the increased pace of leaving home has been accompanied by accelerated young-adult household formation.”
Source: “Starting to Launch: Millennials Are Leaving Mom and Dad’s Basement,” Fannie Mae’s Housing Insights (2017)