Three weeks ago, we noted with some alarm [5] that the number of women age 18 to 34 living with their parents is now the highest since record keeping began more than seven decades ago.
According to a study by the Pew Research Center in Washington, 36.4% of young women have now moved back to the basement, so to speak. The culprit: weddings. No, really. From Bloomberg [6]:
Eternal happiness can wait. Millennials are much less likely to be married than their parents were at their age, and marriage often serves as an impetus to move out.
Of course the real reason why 18-34 year-olds are moving home is because the US economic "recovery" is characterized by a labor market that, far from being a "robust" creator of breadwinner jobs, actually churns out bartenders and waiters. The sad thing is, between lackluster wage growth, crippling student debt, and bad decision making when it comes to picking a college major, some millennials are finding out that serving drinks is a far better way [7] to make ends meet than taking a full-time job for a meager salary that all but guarantees you a spot among America's growing peasantry.
On Monday, we get still more evidence of the above, this time from the Commerce Department, who reports that 31.5% of 18-34 year-olds now live with their parents. As you can see from the following, this is one graph that is the definition of "up and to the right":
If that were a chart of some "key metric" a startup founder dreamed up with the help of a VC backer, you'd have yourself a billion dollar unicorn. Unfortnately it's not. It's an illustration of just how abysmal the US economic "recovery" truly is and it's also a reflection of what happens when you pair an inexorable rise in the cost of education with a jobs market that's a shadow of its pre-crisis self.
Next, have a look at the chart of 25-34 year-olds living with their parents:
As you can see, that looks like the highest level on record. If we assume a student starts college at 18 or 19, and finishes in 4-5 years (which may be optimistic but should be a decent baseline), the 25-34 bracket should include quite a few graduates. If these young adults are moving home at a record pace, one has to believe that the labor market is anything but "robust."
But not so fast says Jed Kolko, an independent economist and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley. As WSJ notes, Kolko - like te Pew Research Center - believes this can all be explained by a lack of weddings. Here's WSJ [8]:
Mr. Kolko says that the rise in children living with their parents is largely related to the fact that people are marrying and having children later, not to the weak economy and housing market. Single people without children are more likely to continue living at home much later.
Note that Kolko is asking you to make the following ridiculous assumption: if you aren't married, you automatically want to live with your parents. Obviously, that's absurd.
But one thing Kolko does get right is this: "What I think it means is that the boost to housing from young adults will come more slowly than people expect."
Indeed Jed. But not because unmarried people want to live in their parents' basement until they find their soulmate. Rather, because soaring rents, student debt, and a lack of decent job opportunities have conspired to make independence and self-sufficiency a pipe dream for a third of the nation's millennials.
Also, someone should tell the Commerce Department that there's no reason to put out this type of abysmal data. A "double seasonal adjustment" could fix this right up.
