NAHB Analysis Reveals Significant Pent-up Housing Demand from Key Demographic
WASHINGTON, D.C. – February 10, 2015 – (RealEstateRama) — A recent study of “Boomerang Millennials” who move out of their parents’ home only to move back in may have important implications for this key demographic and what it means for the housing market.
The National Association of Home Builders (NAHB) examined recent research conducted by Judith Dey and Charles Pierret using data from the National Longitudinal Study of Youth 1997. The examination found higher incidence of “re-launch” for Millennials with a Bachelor’s degree compared to those with a lower education attainment and higher incidence of “re-launch” for Millennials from higher parental income household compared to lower parental income households. A “re-launch” occurs when a young adult moves out, returns to the parental household, and then leaves again.
“Understanding the makeup of those who return home could shed light on the timing of the release of what we know is quite a bit of pent-up demand,” said NAHB Chief Economist David Crowe. “The data may indicate that while this age group is delaying what we think of as typical milestones, the combination of resources and education and what we have found about their preferences suggest growing housing demand in the years ahead.”
Ninety percent of those born between 1980 and 1984 left home before the age of 27 – but then more than half returned to their parents’ homes. Of that group, those with a Bachelor’s degree or higher had the highest share of returning to the parental home at 55.5%. Meanwhile, those born between 1980 and 1984 with a high school degree had the lowest share returning to the parental home at 42.1%. When looking at parental income, the research reveals that parents in the top half of the income distribution experienced a higher occurrence of boomerang children than those in the bottom half.
Another important difference is gender: Twelve percent of men in this age group never left the parental home, whereas 7.6% of women stayed. And although women are more likely to boomerang, they are also more likely to leave again.
Studies continue to show that the desire to own a home remains strong for these Millennials. Despite data showing that the age group is delaying household formation, they remain a key demographic in the housing market, and the pent-up demand is expected to translate into housing growth in the coming years.
For more information, please see the full analysis.