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The Number Of Young Adults Living With Their Parents Has Never Been Higher (But It Could Be Worse)
Back in 2012, the bullish thesis for US housing (the one everyone was hoping for, instead of the fake housing "recovery" driven by the parking of dirty foreign oligarch money in NYC triplexes aka the new Swiss bank account, the private equity distressed rental property bid, and bank subsidies courtesy of the delay in the foreclosure pipeline) was that all those millions of young Americans aged 18-34 would finally move out of their parents' houses and start households of their own.
We mocked the idea for one simple reason: those very Millennials, who as everyone now knows can't find any well paying jobs and have zero job security and on whose back the housing recovery was supposed to take place, couldn't afford rent let along to buy a house, and as such would be stuck living in their parents' basements well into their 30's, if not 40's, and why not forever.
Three years after 2012, Goldman has finally admitted that all the talk about a major exodus of your Americans from parental houses and into the harsh crony capitalist world, was nothing but hot air.
As the chart below shows, the share of 18-34-year-olds living with their parents has never been higher:
The Share of 18-34 Year Olds Living with Parents is 4 pp Higher than Historical Averages
This is how Goldman's economist team, which three years ago was among the biggest proponents of the now completely debunked "outward migration" thesis, tries to unveil this all too unpleasant finding:
The share of young people living with their parents increased 4 percentage points (or 3 million individuals) from 2006 to 2012 and has not declined recently despite a much better job market.
Funny how they snuck that part about a "much better job market." Dear crack Goldman economic team: here is where your "much better job market" comes from.
And since the ivory towers of your 200 West headquarters do not allow you to visit the world of the mere mortals, let us clue you in on a big secret: one can't buy - or rent - anything on minimum wage, the same wages which the "booming" sectors of the US job market are getting. In fact, it is precisely due to the abysmal jobs market for young people (those 55 and over have nothing to worry about) which, together with millions of young Americans raking in tens of thousands of dollars in unrepayable college loans, is precisely what is forcing so many young men and women to pay rent to their mom and dad.
Ok, but this is Goldman, surely it won't simply admit it was wrong and move on? Of course not. It will instead create the biggest straw man we have ever seen. To wit:
The share of young adults living with their parents has risen about 4 percentage points (or 3 million individuals) since house prices peaked in 2006. The share of “children in the basement” has not come down recently despite significant improvements seen in the job market (Exhibit 1). The higher youth at home rate has depressed household formation and housing demand. In today’s note we take an international perspective on the drivers and outlook for young adults living with their parents.
In other words, yes - it's bad... But if one looks at Europe, hey - it's actually great! No really:
We use Eurostat and US Census data to compare the rates of children living with parents in the United States and Western Europe. Exhibit 2 shows that there are large differences across countries in the share of young adults living with their parents. For instance, fewer than 20% of Finnish young adults live with their parents while more than 55% of their Italian counterparts do. The US share of youth living with parents is still relatively low in the international context. Among the 19 developed economies, only young adults from Finland, France, the United Kingdom or the Netherlands are less likely to live with their parents than young adults in the United States.
The US Share of Youth Living with Parents is Relatively Low
from a Global Perspective: Goldman Sachs
In other words, when it comes to the US, it has never been worse, but don't despair - at leas the US is not Italy where 60% of young adults spend every night with their parents. Yes, this is what now passes as Goldman economic analysis.
But maybe, just maybe, if one ignores the structural and cyclical factors inherent to every other culture - something which makes any comparative analysis absolutely idiotic - the fact that the US rate is soaring has something to do with the abysmal and quite full of slack US labor market.
Not at all, claims Goldman, which was wrong about everything so far, but is confident it will get this right.
Consistent with our earlier work, a decomposition analysis suggests that underemployment alone cannot account for the increase in the rising living with parents share post-crisis. For example, Exhibit 5 shows that about ¾ of the rise in the share of 25-34 year olds living with parents can be explained by the higher stay at home rate among the underemployed. How much of the difference between pre- and post-crisis is cyclical vs. structural is difficult to say. In the past, we have found compelling evidence for cyclical factors. However, if cultural factors play an important role—as suggested by the international evidence—cyclical upturns could turn into structural shifts if living with parents becomes more socially acceptable over time.
The Rise in the Share of Underemployed Living with Parents
Explains ¾ of the Aggregate Rise in the Share Living with Parents
In other words, please ignore the fundamental error in our hypothesis because soon it will be cool to live with your parents. "Just look at Italy." This, again, is what passes for "analysis."
Finally, considering that the exodus of young Americans from the safe (and rent-free) cocoon of a parental basement and into the harsh reality of the US housing market is one of Goldman's top catalysts for a bullish bet on US housing, does the Goldman economic team retract said outlook on this admission that it was just a little confused when making predictions which have now been exposed as a gaping error of judgment? Absolutely not:
If most of the young adults currently living with their parents do not move out anytime soon, does it threaten our optimistic outlook for homebuilding? Not really. As we explained before, population growth alone is likely to contribute about 1 million households per year over the next few years. Population aging may add another 100k households per year as older individuals are more likely to live independently than younger individuals. Therefore, our baseline forecast of 1.1-1.2 million household formations—which should lead housing starts to 1.4-1.5 million assuming 300k annual demolitions—does not depend on many young adults moving out of their parents’ homes.
So Goldman was wrong about about the whole "young people exiting basements" theory, but is confident this is not an issue because population growth - i.e., more young people ending up in their parents' basements - and of course tens of thousands of Syrian refugees to add to household growth, will fix the first error by adding even more errors to it. Sheer analytical brilliance.
And we wondered where China got the just as brilliant idea to fix its housing market by forcefully uprooting 100 million farmers and transplanting them into China's ghost cities, a plan which is brilliant... until one realizes that those 100 million farmers will promptly start a revolution once they find no jobs waiting for them in their brand new centrally-planned experiment habitat. Maybe they hired a Goldman consultant on retainer.
At least there is no risk of US Millennials starting anything ever, let alone a revolution: America's biggest generation is far too busy looking at its iSomething.
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When I was redoing my front yard this spring I met this woman said to me "I have 8 people living in my house"
they are her adult children with spouses! These aren't little kids, they are adults and they drive cars to work, which is why a commute of 30 miles
can take me 5 hrs round trip now! Some great economy, eh?
My mother in law's next door neighbor was like that. Six cars parked in the driveway and the street. Two up on blocks at any one time. Really classed up the hood.,
Are you all sure that it's not parents living with their kids?
If the labor market is stagnant where you live then move where there is work.
This is why I quit trying to convince friends where I used to live to relocate.
People (fallacy) would rather bitch and moan then do anything about it.
Easier to relocate to a better area when you have nothing tying you down like a mortage or childen.
I was told that I'd need to know the difference between then and than to get a job.
Howsa bout a nice steaming cup of.......YES WE CAN!!!
Yeah but you wont see any member of congress, senate, or any other politician complaining, will you.
Life is great! living off the tax payer's hard work and devotion to their country when all you have to do is lie for $175K a year, plus insider wallstreet info.
175k plus the $1000/month car lease benefit:
http://www.house.gov/content/vendors/leases/vehicle.php
WTF happened in 2008 because it looks like that was a flexion point???
Duh...
The family next to me has the parents and their 2 children (plus spouses) and each of the offspring have 2 children. 10 people in a 2 bedroom house maybe 1400 sq feet. 8 cars.
Get a bicycle, you'll save about 220 mins on your round trip and get free exercise, not to mention savings on gas.
This business of labeling Gen Y as "Millenials" and stating they are the biggest generation is a bit over the top. All modern generations are close in size, because the birth rates are steady. Enough marketing already.
The point about there being no jobs and no economy is an important one. The real story is that the true economy, individuals conducting their own affairs (not corporate conglomerate cronyism), has been shrinking for decades. That's how we arrived here, where everything is welfare from the State and living on legacy wealth which is quickly being transferred to the elitists through their inflationary system.
God damn you are a totally clueless fucking moron idiot.
+ 1 well thought out Poaster
Ghost that was mean
you are right about welfare and wealth transfer (from greatgrandchildren to now) but are wrong about birth rates - Feminism has created a culture where honest, caring marriages and children are not the norm. Instead, we have an abortion, welfare and divorce culture.
We have people buying lobsters with EBTs driving to the store in Cadillacs...where's the incentive to go get a job?
America will need all those McMansions built during the boom-time; you'll see a return to 3-generation housing before too long, as nobody but the very rich will be able to afford nursing homes.
And may whatever deity exists help those people presently in nursing homes, as they will get turned out due to cost increases and no one is left - or is able - to take them home. We may see a mass die-off of the elderly as retirements and pensions are eaten by inflation or other factors, Social Security crashing and burning, etc. and they have no place left to go but the street. This will become, as the title of a popular movie went, "No country for old men."
I see the war on the elderly coming also. I expect to get a nice envelope from the SSA on my 65th birthday with a cyanide pill in it, and a number to call when I take it. Soylent Green is people!
I must be luckier than you. I get to wait until I am 67 for my letter pill.
I discussed with the Mrs. about reitiring overseas. She was dead against the idea at first. But, now she's asking for a list. There is no reason to stay stateside. At 4k/month, you can have a great life in many parts of the world.
Oh boo fucking hoo.
I ain't getting jack shit cause the country will be bankrupt.
Lets stack the elderly like cordwood and light big bonfires and take all your mothball smelling shit and burn it too.
It's arrived, an elderly friend of mine was diagnosed with breast cancer (yes she got regular mammograms) seems a mastectomy is day surgery now. Not allowed one night in the hospital. Unreal.
corporate management can cut costs to the bone and trim inefficiencies these days ... i don't doubt that
but having lived with my mom falling down the stairs in March to go through a daily routine to make sure she eats ...
she had to have hip surgery twice and her dementia just accelerated to where she is in a assisted living facility.
could go long but suffice it to say I'm pretty impressed with Colorado's medical system - of course her long term care insurance is perfect and doing what it was intended to do
it really didn't look like she would make it after the surgeries but we just made sure she got what she needed to recover - pretty difficult as she no longer walks ; no longer feeds herself or the functions...we did it, she celebrated her 80th birthday recently...she talks enough to say "I Love You" over and over
it'll be a year in march - which would put her in the 25% of people in her age group that have her situation who live to a year. I haven't heard the stats on year 2 or year 3 ...
peace
Those mcmansions built by illegals and cheap crap materials from china will be falling apart soon.
I was talking to a friend who works in the construction industry. He was laughing about a family that had him retrofit high security doors on their mcmansion. He said if someone wanted to break in, all they had to do was peel off a section of the cheap siding and kick a hole right through the outside sheeting and drywall. 90 seconds and you're in!
And to that negative vote, I can only say it's already starting. Towards the end of his life, my father had to have constant care. None of the remaining family members were medically qualified.
He had managed to save a lot of money, but home health care was 15k a month, so he opted for an assisted living home...at 5k a month. In my visits, he'd tell me of how some residents were no longer able to afford the place, and had to go to one that was notorious for being of lesser quality, one that smelled like a dog kennel from the constant stench of urine. And presumably, they were the lucky ones. They had someplace to go.Will we?
I made my observation not out of gloating but out of horror. For that is what awaits us all in the face of a financial collapse. Few are thinking of this because they're still able-bodied. But what will happen when they're not...and have no means of supporting themselves or their families? These bankster MFers have sowed the wind; the whirlwind is not far behind.
This is why you need to live life NOW and not "save up" for retirement.
For me, it's a foregone conclusion that I need to do stuff now or I will be too ill to do it later.
The corporate world has us slaving away at dead end jobs with the hopes that when we get to 65 years old we can relax and enjoy our "golden years". I even read a BS study on the Drudge Report today about retiring makes you happier.
By the time I get to the "golden years" the only thing golden will be my bedsheets from me pissing myself. I'm so mangled from blue collar work that I will be lucky if I even see 70.
The retired folks I do know have regrets that they didn't do more when they were younger and healthier and they regret wasting so much time at work, and not enough time with their family. Their hindsight influenced me to say f-it and I'm just going to work part time until I die.
The 2 jobs thing or long hours, not for me. I always think of Tyler Durden putting a gun to my head and asking me what I wanted to be. That's what I do, because none of us are getting out of this world alive. That's the joke.
I have to wonder what kind of 26-30 year tail is still living with mom and dad, just hoping for an estabilshed man to take her away and let her sleep in the master bedroom for once. I'd like to think it's girls that look like what Taylor Swift is going to look like in a few years, but they're probably mostly more like that fat slob from "Girls"...
You'll only find pigs and mental issues
I always thought people had motivation to communicate even in their exxtra-normative state. Now my parents put me on antipsychotics after a career of talking to myself through high school. Listening to "love goes on and on".
fuck the benefits i'd rather snip it myself than deal with ponzi trash
We sorely needed a reset that wanted to begin in '08. It would have been terrible but largely over by now. Ironically, we got most of the terrible anyway and are still stuck with it--unrelenting 23% real unemployment (not the bullshit 5% statistic fed to us by our Uncle). But, hey, our unemployment remains solidly 2% shy of our Great Recession qualifying as a Great Depression. So at least we got that going for us.
for those fortunate enough to be near the punch bowl somehow manage to keep drinking ....there's just a much larger number who are realizing the room to the punch bowl now has armed security guarding the door ...and they're outside the room...maybe not even in the building
the internet phenomenon cannot be understated
Recall Americans criticizing Asians for years and now Americans have been pussified and sheltered.
One thing I learned from most of my travels overseas is how close and helpful families are with each other. I've also seen that with hispanic families living here. Kinda jealous, since I can only stand family for up to 4 hours in a single gtg session. I usually prefer and busy myself over a hot bbq grill with 90 degree heat than sit and watch family members compare cell phone features and repeat TV news stories.
AMEN! Americanos in Asia used to complain like the dickens, but now most don't because they know the alternative would be to go back to USA - and NOBODY wants to do that.
I see kids living with parents as a healthy development borne out of adversity. It's a better environment and safer environment for grandchildren as well.
There are big gains on savings in rental, gas, shopping, electricity and insurance.
Until the music stops. Once mom is done working, then junior and/or little Miss will need to step up into better employment to maintain the household. I got money that says there won't be any "better employment" once dear old mom is done. The tune is just about over now.
One of my co-workers was complaining about her 23 year old daughter moving back in after she got her degree. Can't find real work and working two odd jobs to save up some money. I told her that's good for you and your daughter. I hope my kids stay at home, work, save their money until they get married, even if it means after 30+.
But what's the end result of that working such shit jobs that she has to live with her parents? Even if she saved enough for a down payment on an overpriced house, it would be absolutely irresponsible to take on the liabilities of a mortgage. Shit part time jobs have variable hours usually. There's no such thing as job security. It's pretty telling how far from reality you are that you would be happy your child makes too little money to pay rent and utilities for themselves even. What's the matter with the older generation? You are the controlling helicopter parents. You won't let go and then you complain about reaping what you've sown. If the millennial generation is so terrible, well, you raised us, or didn't.
Multi-generational homes were a thing of the past and now they are becoming the trend again. Of course, this will be detrimental to the housing industry until they adapt and start building multi-generational homes that are more reasonably priced; not like the latest showhomes that feature in-law suites and elevators.
just read a Seattle Times article about the explosion of back yard cottages and in-law type units being built and planning & zoning & fees for water , etc ... apparently they are going to go for it in light of their housing shortage ... and most likely, many families realizing it is a multigenerational USA now ...
i say much better to have these houses more occupied and lively - and most older people benefit from the arrangements in many ways
How many people's parents are still together in this day and age? This is the era of single patenting subsidized by Uncle Sugar.
I liked the show, the Waltons when three generations lived under one roof. That was when there was respect for others, morals, ethics and a willingness to work hard. True or not, the show did promote a person being productive in whatever endevour they chose. The family lifestyle was not just based on financial benefits.
Unlike the current Waltons that are gazillionaires, own multiple estates, and squeeze their suppliers and employees for every last penny.
walmart actually succeeded in building a store that a person could literally do ALL "consumer" activity. The superstore around here has auto shop - to food to clothing to gardening to electronics to you name it ... banking and optometry ...
i'm not pro/con walmart, just commenting
I threw my little bass-tard son out on the streets 3 years ago,on his 34th birthday,to teach him that life isn't always about a free lunch..It was the worst fucking mistake I ever made,as mommy divoriced me soon after,and moved the ingrate into my room,right after she got the house from the divorice settlement..Now,the smug little bass-tard pisses on me when he catches me passed out under the Norfork Southern railroad trestle..In fact,when I woke up this morning,I smelled like shit,which leads me to believe he may have took a dump on me,too..
@chucho - ha! Good one.
What happened in 1983?
You might want to ask David Stockman about that....
We're all Amish now :P
from that link:
Despite their separation from modern culture, the Amish in PA are entangled with the larger economic system. They lean heavily on the broader world for raw materials and supplies, and they use banks. Just like other citizens, they pay all taxes, with the exception of social security. Similarly, the PA Amish pride themselves on being self-sufficient and do not collect social security benefits, unemployment or welfare checks.
It could be worse, I am 26 and spent this Christmas in the street with the bums. I write this from a homeless shelter where I had to pay a bribe of $2 for the WiFi password. I come from a broken middle class broken home and my family cannot help me. Not asking for anything material as I do alright considering. I get to read a lot of good books from the library such as John Kay's Other People's Money. Anyways If anyone has any advice on how I could get into finance with my partial college degree, please share. I did well in the accounting and econ classes I took. Merry Christmas everyone, hope yours was better than mine.
Yup, multi-generational households but you won't see the lazy fuckers outside cutting the grass. They hire that work out.
I remember the Waltons, 3or 4 generations under 1 roof, but there was no dead weight, everyone of them did something to help out/ night grandpa-night John boy-night elly may.....good memories LoL!!
yeah i agree ... i was born mid 60s ... i think it was a most excellent time to be born ... right when Sgt. Pepper's was being released to the world ... i've read and listened and lived with so much of the music and the medicines that were involved in that time ...
i'm a torch-bearer for those peoples and purposes ...
i sense a Lord of the Rings dimming occurring as the Brightness and Beauty of our potential is suppressed ...
LovE
Maybe kids will get to inherit the parents jobs soon!
the only millenials who have good jobs/careers are those with parents in corp america / wall st / deep state industries or the super smart kids with STEM degrees (most of them come from $$ tooo)
if youre just an average college graduate you aren't getting a good job. if you're sharp and got sass you might get hired on as a contractor with no benefits and 3-6 months of work at a clip.
there is no future for the vast majority of young americans
my sisters kids move in and out with her as their fortunes wax and wane....both nearly 30, each earning about $8/hr...(when they can find work) when they find a group, they all pile into a rental together. When laid off, fired or the group beaks up, back home they come. This is in the SF Bay area
I did that before I become 30's.
Stayed in some old houses, with some silly hippies who all seem to be with children now except for thr dykes.
The American Indians left their Elderly in a field in a snow storm when it was time. My daughter has stated I could choose the field.
The Inuit used to put them on an ice floe and let them drift out to sea - no burial needed.
The reason the graph tapers off at 2012 is because many of those kids are now over 34 years old and are no longer counted.
I put this comment on this article which appeared on ZH a couple of months ago.
I found that from the '90s things started to change, it became hard to find a job, and this trend continues at an ever increasing speed, I think there is no hope for any change (hahaha), just more slavery and servitude, some of these jobs are not even real jobs. Ever see the count on a viewed job ad ? this week I spotted one in my field that was an hour old, it had been viewed 1200 times already.
What field are you in?
I am a Graphic designer, kinda multi-talented, I do web design, animation 2&3D (including modelling and sculpting), image editing, print media and film editing, effects application and visual conception of projects.
I was also an art studio production manager for 12 years, till I got tired of this specific studio.
Keeping to the articles story though, I left home at 19, which was quite normal around my time, but I can understand why the young adults of today, cannot find a way out on their own, they have been taught nothing about survival in this age. It is purposely done.
Yes you are right deekra (dear). Things started to get bad in the 1990s and now they are just plain AWFUL!
Also many job ads even online are FAKE and put by the employment agencies to get resumes. And even when a job is real (those rare times), one company might give a job to several agencies to find a candidate so that same job may be advertised in many places, but it is still only for ONE JOB.
So often when you apply to a similar job you are applying for the same job rtime and time again and you will be called by several agencies for an interview all for naught because IF (and that's a big IF) you get an interview it will be for that ONE job. You and hundreds like you.
My husband was out of work for 18 months. He is an IT pro with graduate degree and when he was laid off he was over 40 and it was no picnic. It was then that we found out the hard way what a ca-ca hole USA really was.
We will all be hunted ... for the meat on our bones ... sooner than you realize.
National Association of Realtors cheerleading the "Greekovery" in 3...2...1
The "living with parents" qualifier for the data is misleading, as it should read "living with family." I know a lot of millenials living with grandparents, aunts, uncles etc.
If you made that modification to the data set, guaranteed the percentage goes up by at least 5%.
not to worry...influx of millions of muslim "refugees" will fix that housing problem
I am thinking eco village. The idea of living on $10,000 a year or less because of extreme downsizing might be right for me. Grow my own food. Buy from your neighbors. Energy co-op. It is the only way I see to beat taxes and the tollbooth economy (where everything you do you pay a percentage to the corrupt politicians.) Check out Dancing Rabbit eco-village.