Millennial Households Are Down but Not Out
Falling unemployment and rising wages are poised to stimulate household formation among younger adults.
Younger adults were hit harder by the global financial crisis than any other age group, and their circumstances have been slowest to improve. Household formation among younger adults has been correspondingly weak postcrisis and explains much of the slow pace of the housing recovery. We estimate as many as 2 million households were "postponed" among the 25-39 age group since 2006.
Recently, conditions have begun to improve for younger adults, setting the stage for stronger housing activity in the years to come. Labor markets have tightened since early 2015, catalyzing a significant and long-awaited rebound in inflation-adjusted wages for younger adults. With unemployment remarkably low, underemployed young workers are finding better job opportunities. Household formation among younger adults should accelerate, with a lag, as balance sheets are rebuilt. Rising mortgage rates are unlikely to prove an unsurmountable barrier to homeownership, nor do we see any evidence that millennials are meaningfully less inclined to own than prior generations. Meanwhile, new housing supply is changing to meet nascent millennial demand, as homebuilders’ mix shifts to affordable starter homes. We expect 2.25 million new households to be formed by those aged 25-39 through 2020, based on these conditions.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.