More Adult Children Move Back in with Parents
We can all agree that we are experiencing unique times. As our students are graduating from college and the job market remains sluggish, these young adults need a place to live. Moving back home with mom and dad is becoming more of the “norm”. It is a great way for the students to decrease their debt load, save for a down payment for a home of their own. The article below summarizes exactly this. The biggest question that comes to my mind is what will happen when the market turns and there is an influx of these first time buyers in our market. Will we be ready?
More Adult Children Move Back in With Parents
With the job market still bleak, more adult children--particularly young males--are moving back in with their parents to cut housing costs.
About 19 percent of males aged 25 to 34 live with their parents--a 5 percent increase from 2005, according to new U.S. Census data. About 10 percent of women aged 25 to 34 live with their parents, an 8 percent increase since 2005.
This "cuts into the formation of new households quite a lot," Mark Zandi, chief economist for Moody's Analytics, told CNN Money. Indeed, Zandi estimates about 150,000 fewer households are being created per year than what’s considered healthy for the economy.
The decline in household formation can be felt in the housing market and is contributing to the drop in property values, some economists note. Even the rental market, which has been posting gains recently, could be even brighter if adult children would rent instead of “double up” with their parents, economists note.
"If more young adults were in the market for rentals, rents would rise and higher rents can tip some households [of all ages] into buying homes," Lawrence Yun, the National Association of REALTORS®’ chief economist, told CNN Money.
What’s more, with more adult children moving back with their parents, it’s also preventing parents from downsizing and moving into a new home, economists note.
Source: “‘I’m Home!’ Adult Children Move Back In,” CNNMoney (Nov. 4, 2011)
FMI about the Mid-Coast Housing Market contact Heidi Steele at Jaret & Cohn Real Estate, 25 Park Street, Rockland, ME 04841. Heidi can be reached at 207-596-0352 ext.221 or firstname.lastname@example.org