According to the most recent Census Bureau data, the U.S. added 1.15 million new households in the past year. This is the fastest rate in more than six years, an indication that fears about the recession are easing. A handful of these new households are young adults, many of whom have opted to live with their parents after college because jobs were scarce and the economy was unstable. Nearly 2 million adults ages 18 to 34 were living under their parents roofs last year, but it looks like the number will significantly decrease by this time next year.
This is a good sign for the economy on the whole because a rise in household formation means that there is employment growth. Many students are finding jobs when they leave college and more couples feel confident enough to tie the knot and move in together.
The real question for the market is are they renting or buying? Many are deciding to rent because they can’t afford to buy or are wary about the housing market. But there’s a dwindling supply of apartments in metro areas, where young adults tend to settle. In addition, rents are on the rise and a mortgage payment may be a more affordable option for some. If you take a look at the Capitol Hill neighborhood in Seattle, a sought after area for young adults, rents are up 15%; the median rent is now $1500.
Though many young people are still opting to rent, there is a slice of the demographic that understands the value of equity and sees the low interest rates as an incentive. Right now there is an opportunity to buy low and sell high in many areas as the economy continues to improve.
So, for all you parents who are looking to send away your boomerang child (you throw them out there and they just come back), rest assured that the tides are changing. In fact, many parents are investing in real estate themselves, and becoming co-owners of new homes with their children.
Whether you are a parent looking to purchase a second home, or a young person looking to buy your first home, the real estate experts at Team Troy can help. We have agents standing by to help you find the perfect home for your unique situation.