Monday, December 6, 2010


Check out this amazing graph from economist Tom Lawler, which takes government housing survey data to track the national home ownership rate among 25 to 34 years and compares it to the percentage of 25 to 34 year olds living at home.

Living with ParentsAccording to Lawler, between 1994 and 2005 the home ownership rate among 25 to 34 year olds increased by nearly 30 percent, to an all-time high of 13.5% at the peak of the housing boom.

Conversely, since the housing bubble burst, the number of 25 to 34 year olds who have moved back in with mom and dad has spiked from less than 37% in 2004 to almost 43% today. 

Lawler's study confirms what many of us perceive to be the case, based on conversations and anecdotal stories we hear all the time.  Gen Y is rapidly becoming the "Boomerang Generation", but the real question to be answered is how long this trend will continue.

If you're banking on any kind of economic recovery, you must presume that large numbers of these "Boomerangers" are going to leave home again.  Whether they choose to rent or choose to own, there's going to be added demand in the market, which certainly won't hurt landlords or homeowners. 

Historically, on the other side of every boom there's a bust, and on the other side of every bust there's a boom.  This chart shows where some of the demand will come from just as soon as this economy starts to create jobs again, whenever that may be.