Lots of Millennials Living With Parents

Despite its enormous size, the millennial generation has not had the impact on the US housing market that we would normally expect. One big reason for that is more young adults are living with their parents, or other relatives, than at any time since 1940. From the Wall Street Journal:

Despite a rebounding economy and recent job growth, the share of those between the ages of 18 and 34 doubling up with parents or other family members has been rising since 2005. Back then, before the start of the last recession, roughly one out of three were living with family.

The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the economy improved.

 The result is that there is far less demand for housing than would be expected for the millennial generation, now the largest in U.S. history. The number of adults under age 30 has increased by 5 million over the last decade, but the number of households for that age group grew by just 200,000 over the same period, according to the Harvard Joint Center for Housing Studies.
Analysts point to rising rents in many cities and tough mortgage-lending standards as the culprit, making it difficult for younger Americans to strike out on their own.
But this trend won’t last forever. In fact the article goes on to state that economists predict the millennial generation will more than double its current number of households through 2025. If mortgage standards don’t loosen, and/or average incomes don’t rise as quickly as housing prices, then that could have a positive impact for the apartment industry.