- In 2012, there were more than 71 million young adults aged 18 to 34 living in the US—more than the roughly 69 million when the baby-boomers were in this age group in the mid-1980s.
- The share of adults under age 35 living at home, especially among those aged 25 to 34, is at the highest level since 1981. More than 30 percent of those 18 to 34 lived with parents ; the historical average is 28 percent.
- The share was 13.6 percent among those aged 25 to 34. The historical average for this group is only 11.7 percent. While a 2 percent difference sounds like a small amount, this translates into roughly 800,000 individuals.
- The share among those aged 18 to 24 was 56.2 percent compared to a 52.9 percent long term average. This translates into roughly 1 million individuals.
- At the same time, nearly 26 million households were headed by those under age 35. This group has a homeownership rate that has declined dramatically from its peak of over 43 percent in 2004 and 2005. In 2012 the homeownership rate was roughly 37 percent—the lowest level since publication of this data in the early 1980s. Continue reading »
Strong buyer demand for residential homes continued to outpace supply in March. The Buyer Traffic Index rose to 69 while the Seller Traffic Index inched up to 41. This based on information in the March REALTORS® Confidence Index (RCI) Survey.
In many areas of the country REALTORS® reported low inventory levels of homes for sale. Tight inventory conditions have been cited as leading to higher prices and reduced time on market.
What Does This Mean for REALTORS®?
If a potential buyer asks why sales are down in some areas, one can note that a major reason for sales declines recently has been the hot sales market—a lack of inventory relative to the number of people who want to buy.
By Selma Hepp, Ph.D., Senior Economist
California Association of Realtors, Research and Economics
As the housing market shows signs of improvement, a looming question keeps repeating: What is the size of pent-up demand? Answering that question is not easy. It requires some counterfactual assumptions, such as “what would be if it wasn’t this?” To answer the question, however, we could look at some trends that persisted prior to the recession and project them forward. Housing demand, among other things, depends on household formation. New households result from adult children leaving parents’ households, singles or families leaving shared housing arrangements and creating their own. As suggested by other research, slowing of household formation has been concerning. While, household formations generally slow during recessionary periods, this recession has created particularly hard situation for new household formation. The situation is especially acute among the younger generation leaving colleges who have, instead of starting their own households, moved back in with their parents.
By Selma Hepp, Ph.D., Senior Economist
California Association of REALTORS®, Research and Economics
At May’s midyear legislative meetings held by the National Association of Realtors in Washington, DC, a panel of experts in a session titled “Shifting Demographics and Housing Choice: A Whole New World?” discussed future housing market demand and trends to keep in mind as we think about the future of housing in the U.S.
The biggest takeaway was that baby boomers will increasingly contribute to housing supply as they age, yet echo boomers are in a difficult position to absorb the inventory. The echo boomers, also called Millennials, are those currently ages 17 to 31, and account for 62 million people. And although future housing demand highly dependents on different rates of household formation among Echo Boomers, this generation is in a precarious position.
In addition to having seen the worst housing downturn, these younger buyers have been hit hard by the recession. Faced with an uncertain job market, no real income growth, tighter mortgage lending rules, and mounting student and credit card debt, it is no surprise that some of them do not put priority on homeownership.