Millennials: Striving, Not Slacking While Living with Mom and Dad

January 8, 2016 / Amy Butler, Regional Vice President—Heartland Region

Millennials: Striving, Not Slacking While Living with Mom and Dad

Today's millennials (ages 18 to 34) are more likely to be living with their parents or a roommate than at any time since the Great Depression, according to a study from The Pew Research Center.

Today, 26 percent of millennials live with their parents, according to Pew researchers. In 1980, 17 percent of young adults (20 to 34) lived with Mom and Dad, according to a separate study.

The numbers of young adults still living with their parents are even more elevated in higher-cost areas. According to recent headlines, 48 percent of millennials in New Jersey live with their parents—more than in any other state.

The media often portrays millennials in this category as pampered slackers, but that's unfair in many cases. Now that the economic picture has improved, it's easy to forget the enormous difficulties of 2009 when the unemployment rate for this age group peaked at 12.4 percent. For college graduates of this era, there were almost no entry-level jobs with solid career tracks.

Coming of age in that era of upheaval, it's not surprising that many are reluctant to purchase a home. In my view, many of today's twenty- and thirty-somethings are striving to make the most of career opportunities that didn't exist for them six or seven years ago. As a result, many are putting in long days at work to further their careers and are living with Mom and Dad (or with roommates) while they pay off college debts to prepare for the next steps in their lives.

Job opportunities still aren't as plentiful as they were a decade ago, so the smart strategy is to stay flexible—to grab a promotion or a new opportunity even when it means moving to a new city.

As a result, this age group is not yet receptive to the housing industry's marketing messages because they're placing work ahead of settling down with a house and children. Eventually, their focus will shift to starting families of their own, but in the meantime, our industry needs to focus on messages this group may be more open to, including:

  • Buying a house is cheaper than renting in almost every part of the country. (More details are in JoAnne Skerritt's Buy vs. Rent Equation blog post from November.)
  • There's a cost to delaying a home purchase. Rising housing costs will likely price many people out of the neighborhoods they want to be in now.
  • Home prices will rise and fall over the long term, but 30 years from now, most homeowners will be glad they invested in a house they own free and clear. For most of them, it will be a bigger asset than their 401K or other retirement savings.

With unemployment declining and incomes rising, economists are predicting a strong 2016 for the housing market. It could be even stronger if the industry can find ways to make millennials understand that buying a house isn't as daunting a prospect as it seems (especially for people who've been able to reduce debt levels by living with Mom and Dad or with roommates).

United Guaranty's Resources for Home Buyers provides a variety of solutions for first-time home buyers, including a detailed comparison of the costs of Buying a House versus Renting over a five-year period and options for affordable down payments.

Amy Butler

Amy Butler is Regional Vice President of United Guaranty's Heartland Region. Butler joined United Guaranty in 2001 and has progressed through the organization from Customer Service to Sales. Most recently, she was Vice President of Strategic Accounts. Butler has been the President of the Atlanta Mortgage Bankers Association, earned many Associate of the Year awards, and recently earned the Accredited Mortgage Professional (AMP) designation. United Guaranty's Heartland Region includes Illinois, Indiana, Michigan, Minnesota, Iowa, Nebraska, North Dakota, South Dakota, and Wisconsin.

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