While many Millennials are finally in a position to strike out on their own, economists say the impact of this trend on America's residential real estate sector probably will not be felt for at least a few more years. Many of those born between the early 1980s and early 2000s still do not have the financial means to buy a home as they continue to struggle against lack of employment, crushing student loan debt, tight credit standards, and other factors.
The landscape is not likely to change anytime soon. According to the National Association of Realtors, the share of U.S. adults under age 35 living at home in 2012 reached its highest level since 1981. More than 30 percent of those ages 18 to 34 lived with their parents, above the historical norm of 28 percent. Among those between the ages of 25 and 34, meanwhile, 14 percent still lived at home compared to the historical average of 11.7 percent. NAR research also shows that the homeownership rate of those under 35 declined to nearly 37 percent in 2012 from a high of more than 43 percent in 2004 and the following year.
The buying power of Generation Y should not be underestimated, however. NAR calculates that more than 71 million young adults aged 18 to 34 lived in the United States in 2012. The good news is that now more of them are finally starting to find full-time employment, states Trulia chief economist Jed Kolko.