The state of California has the highest rate of millennials still living at home with their parents. Statistics show that 34.5% of millennials in the state are in this situation. Meanwhile, the national average is 30.3%, which is still remarkably higher than historic numbers.
Based on these findings, it is clear that millennials do not want the same things as previous generations. Many millennials do not want to own homes, and they plan to have smaller families. Instead, this younger generation wants centrally accessible properties that are in close proximity to places that are relevant to them.
Furthermore, the young adults that are not living with their parents in California are typically stuck living in a rental situation, paying virtually half of their total income on housing. These young people have a very difficult time saving up money to put a down payment on a place of their own.
Many millennials are also weighed down by student debt. A recent study from the Federal Reserve showed that there is currently $1.3 trillion worth of outstanding student loan debt in the United States. Obviously, a large portion of this debt is held by young people. This is a major increase over student loan debt in previous decades.
In 2000, only 24.6% of people between the ages of 18 and 34 in California were still living with a parent. Of course that number is substantially higher today. Those young people who do want to live on their own are most often immediately sucked into the “rental cycle”. They cannot afford to save up for a home because they are stuck paying high rent, so they have to keep paying rent in order to have place to live.
Making matters worse in California is that the housing market it being driven by real estate investors, foreign buyers and people against urbanization and new housing developments. The result is that young Californians simply cannot afford to purchase new homes.
Another factor is that the average size of the American family has been shrinking. Most people rush to buy a new house when they expand their families by having children. But since millennials are waiting to get married, have children and settle down, they don’t need larger homes. They are perfectly content living with mom and dad. Indeed, there is currently a historic high of 68.8% of people between the ages of 18 and 34 that have never been married. And those that do get married are often deciding not to have many kids.
This phenomenon is starting to affect the retirements of parents of millennials. They are still working so that they can help their children purchase homes so they can get them out of the house. Others are allowing their children to stay at home, which forces them to keep their larger houses. In that case, they still have to delay retirement in order to maintain their expensive properties.
Needless to say, until millennials start bringing home bigger paychecks or the real estate market becomes more accessible, it looks like young people will continue to live at home.
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