The number of young adults living at home continues to hover near record levels. Just last month we found out that a record number of Millennial women are living at home with their parents. This dates back to when modern day record keeping began in 1940. Millennial men are tracking with this trend as well but are just a few points off the record set 75 years ago. In other words young Americans are having a tough time forming households. And this isn’t a shock for Los Angeles where renter households spend nearly half of their income on housing payments and makeup a majority of households. Those that buy inflated $700,000 crap shacks in many cases are spending 40 percent or more of their income on housing payments. In reality what is happening is that many young Americans are too broke to even set out to find a rental, let alone purchase a home. This is why the homeownership rate is reaching generational lows all the while investors are pushing up prices in markets with low inventory. Local families and young buyers are being priced out.

Millennials are staying at home in record levels

Part of the house humping meme was that young buyers represented this hidden treasure trove of pent up demand. Once the economy got out of recession, these young lustful lovers would get hitched and start popping out kids in their newly mortgaged property. The recession officially ended in the summer of 2009. Over six years later young adults are staying put at home in record fashion:

“(Bloomberg) Some 36.4 percent of women age 18 to 34 lived with their parents or relatives in 2014, the highest since records began in 1940, according to a report released Wednesday by Pew Research Center in Washington. While the share of young men was even greater at 42.8 percent, it wasn’t quite as high as it was some 75 years ago.”

A record number of young women are living at home deep into adulthood. Part of this is a deep generational difference. Men are living at home in record numbers as well. Looking at more recent years you can see how prominent this change is:

What is the point of taking on a ridiculously large mortgage if you aren’t even married or plan on having a small family? Younger people value mobility, going out, and education much more than buying a home. They also are putting off starting a family:

Young Americans today are less likely to be married than their counterparts of the 1940s and 1950s and they are definitely having smaller families. These are merely practical aspects. But more importantly, Millennials in many cases don’t have the money for rents let alone buying a $700,000 L.A. crap shack or a $1 million tech endorsed box in San Francisco.

And Millennials that aren’t living at home are shacking up with roommates. This is happening nationwide:

“(5280) More millennials (typically characterized as those between the ages of 25 and 34) are living with roommates than ever before, and we’re pretty sure no one told them life was gonna be this way. Between 2005 and 2013, the percentage of young adults sharing living space shot up by nearly 40 percent nationwide, according to a recent analysis by Make Room, a nonprofit renters’ advocacy group. Almost 12 percent of Coloradans in this age group have roommates, a figure that ranks second in the country, behind Massachusetts. Entry-level salaries and cost of living have always limited housing choices for young adults, and it’s likely that some elect to live with roommates simply because they enjoy the company. But these limitations can become self-reinforcing in cities with tough housing markets, leaving some young adults with little choice in the matter.”

A large number of Millennials are living at home with their parents or out in rentals with roommates. Yet that massive “pent up demand” never materialized. This is why the U.S. homeownership rate has done this:

The US homeownership rate is at 30 year lows and near the 1965 lows as well. The reason prices have gone up recently is courtesy of low inventory, investor speculation, and foreign money in specific coastal markets. Also low interest rates have created massive asset inflation as investors chase yields and buyers leverage every penny they have to cram into the monthly 30 year nut.

And then we see that mortgage rates make their biggest move up in 2 years courtesy of the Fed now hinting at moving interest rates slightly higher. What is moving this market is massive speculation and young Americans are getting crushed in the housing market.

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