Pew has a new report out showing that even five years after the recession ended, more young adults are living with their parents than before the recession. This is despite the fact that unemployment among 20-somethings has dropped dramatically. What’s more, this trend is pretty widespread:
The decline in independent living since the recovery began is apparent among both better-educated young adults and their less-educated counterparts….This suggests that trends in young adult living arrangements are not being driven by labor market fortunes, as college-educated young adults have experienced a stronger labor market recovery than less-educated young adults.
Trends in living arrangements also show no significant gender differences during the recovery. However, in 2015, 63% of Millennial men lived independently of family, compared with 72% of Millennial women. But a similar gender difference existed during the Great Recession, and both young men and young women are less likely to live independently today than they were five years ago.
But the news might not be quite as bleak as Pew suggests. Take a look at the arrows in the chart on the right. The upward trend in living at home continued to rise through 2013, but it finally began to drop a couple of years ago. That’s not surprising since it’s pretty likely that there’s a certain amount of hysteresis in this phenomenon; that is, a lag between the economy improving and kids moving into their own places. This might be because wages remained low for several years after the technical end of the recession. It might be because higher debt levels took a while to pay down. It might be that it simply took a few years for recession-induced fear to end. Why move out if you’re not sure the economy is really on a long-term roll?
There’s not much question that 20-somethings of this generation have it worse than my generation, which in turn had it worse than the previous generation. That means the recession hit them especially hard. But if these trends are right, it looks like optimism about work and income is finally starting to slowly improve. It’s not great news, but it’s good news.