Psychological Shift as Kids Have No Problems Staying With Parents
A few decades back, grown up children could not wait to start their own nest of sorts. As parents,
you must remember that when you were young, you were so keen to leave your parent’s house.
Well, times change. The spelling changed to ‘live’ from ‘leave’. Nowadays, young adults in the
age group of 18 to 34 largely think that there is nothing unnatural in staying with parents. Most
of these adults partake in the family expenditure evenly, ensuring that the parents do not feel the
financial burden of having a grown-up child around. Also, often kids make a separate
arrangement in the home, thereby taking care that the privacy aspect is not out of focus. Parents
and children both need their privacies.
The recent Coldwell Banker survey of 2000 young Americans revealed this interesting trend. Dr.
Robi Ludwig, a coordinator at the survey, noted that, “Signs of a generation shift is conspicuous.
There has been a huge psychological change in the mindset of the youth. To them, this is the best
survival strategy in a stark economy.”
Another survey from Trulia, showed that a significant 44% of the jobless youth in the age group
18 to 34, are staying with their parents. More interestingly, a quarter of youth with jobs, are also
yet to live their parents’ homes.
According to Jed Kolko, chief economist at Trulia, “These 20 and 30-somethings have a clearer
idea about the housing market.” “They are aware of the fact that they cannot obtain a mortgage
as they have no rent track-record and poor credits. Besides, many have the education loans and
other loans to take care of.” As a result, there is a huge impact on the housing market. First time
homeowners in the market are disappearing. The confusing situation of the real estate industry is
also a matter of concern among the informed youth. A report from two years ago showed that
there were about five vacant homes for every homeless person. The constantly fluctuating rates
in the industry also indicate instability, according to some.
The overall effect is that presently in the US, homeownership is at 65% of the population, which
is the lowest value since 1995. An overwhelming 35% of US population is without homes. This
is the statistics of the US Census Bureau. The rate of new household formation is also at an all
time low. It measures the growth of real estate in terms of new occupancy (renting or buying).
Last measured, it showed an annual average of 550,000 from 2007 to 2011. This is significantly
less than the annual average of 1.35 million in the five years before 2007.
Economist Andrew Paciorek pointed out in a Federal Reserve paper that all these factors
undoubtedly point towards a “significant weakness of the real estate market.”