So, you raised your kids and sent them off to college thinking that once they graduated, they would be off on their own and you would become empty nesters like some of your baby boomer friends. Enjoying retirement, traveling and being on your own.
Then…bam! Your kid moves back into your home. He/she graduated but hasn’t got their footing yet, so they move back in with you to get prepared. But is it the best decision for them? Will it create tension in the home, will there be new rules to follow, will there actually be financial responsibility learned by the child or just a reason to have extra money to play around with.
Researchers at the Urban Institute have found that people who move back in with their parents after graduating don’t become homeowners 10 years later. They have access to a home why would they want to own one? But research also shows that when an adult child moves back into their parents’ home it forces both parties to learn to communicate on an adult level which can be a plus as both parties age.
In 2016, Pew Research Center reported in their paper that it is very common for young adults aged 18-34 to be living with their parents. These younger adults who are moving back home are being referred to as the “Boomerang Generation” so named for boomeranging back to their parents’ home after college.
Our younger generation is financially struggling and making suggestions like “just don’t spend so much” isn’t getting to the root of the problem. These young adults are often sapped with student loan debt for outrageous amounts and then they are supposed to pay rent, utilities, groceries, and work at a full-time job. Most of the older generations did not have the $1.5 trillion in student debt as the younger generation does now.
Another issue is that wages have not recovered from the not too distance Recession we experienced. The economy is in a strong stretch with more businesses looking for workers than workers available. But wages have not kept up with the recovery. Another global-induced outsourcing has eliminated jobs and a college degree no longer guarantees you job stability. Many have got their degree only to take jobs in beginner level positions like fast-food or retail sales.
Our economy is turning in a way that there will no longer exist middle-income brackets. Most of the purchasing power will be for the top 10 percent of wage earners. This will delay homeownership until people are into their late 30’s.
So who will save homeownership? Looks like it may be Generation Z our up and coming younger people between 18 and 23. They have a desire to own a home and are willing to make sacrifices to do it. But they may require financial help either from government programs or from their parents.
But Gen Z may also be occupied with making themselves happy and getting employment that they enjoy more than concerning themselves with the daily grind of bills, debt and such.
Only time will tell if Gen Z can save the real estate market across the country or not. Builders are still reeling from the recession and not jumping into building homes that they know won’t be bought. Inventory remains low and interest rates are playing the up/down game. For May, they dropped back to 4.20% nationally down .05% from April.
Probably the best advice that we can give these younger generations is to not accrue any debt especially student loans. Work and pay as you go for college so you will be in a better position financially when you graduate. Do your basic coursework at a local state college which tend to be cheaper per credit hour. Then work on your degree as you can afford it. Or join the military so you can get the G.I. bill.
And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.