The median life expectancy in the U.S. has increased dramatically over the past century, with average lifespans increasing over 60% from 49 at the turn of the previous century to almost 80 today. Correspondingly, the amount of time one’s children live at home is also increasing, much to the consternation of more than a few of our clients expecting to live the quiet life in their retirement!
Demographics can explain many market conditions, especially related to housing. Contrary to popular opinion, today’s young adults (identified as 18 to 34-year-olds) aren’t necessarily living on their parents’ couches. In fact, the percentage of young adults living at home only increased from 26% in 1975 to 31% in 2016. The biggest shift is in those young adults living with a spouse: dropping from almost 60% in 1975 to less than 30% today. Delaying marriage and childbearing could be the single biggest cultural shift for today’s young adults compared to their parents.
In 1975, over two-thirds of women had children by the time they were 25. Today we must look to women aged 34 to find the same percentage of mothers. The delay is even more pronounced in marriage. In 1975, some 85 percent of women and 75 percent of men were married by the time they turned 30. To find those same proportions today we must look at people in their 40s. The recent boom in urban apartment and condominium living is a direct result of these demographic trends.
Digging further into the data, we find that the age when relationships start remains consistently around 22, whereas the age when people first marry has risen from 22 to 27 (for women) over the past four decades. These new living arrangements have come at the expense of marriage. Over the past 40 years, the proportion of young adults who were living with a spouse fell by half, from 57% to 27%. Young adults are living in more diverse arrangements than at any time in the past.
At 24 million people, the population of young adults living at home in the U.S. is large. The clear majority (81%) are working or going to school, which fits the living patterns of previous generations. Where we see a break with history is in older millennials, aged 25- to 34-years. One in four of those living at home are idle; not in school, not working, nor are they looking for a job. This is the group that concerns their parents (and society) the most, and the key factor here appears to be education. Of those young adults living at home, not in school or in the workforce, only 11% have a college degree, and 65% have a high school diploma or less.
If one theme describes the change in young adults’ living arrangements over the past 40 years, it is growing complexity. In 1975, young adults shot for one milestone: family formation that usually occurred in the 20s, i.e. living on their own, getting married and having children. Today, while the milestones may have remained the same, the pace of achievement has been delayed and the pathways to independence are more diverse.