The job market for most college graduates is pretty decent right now. Fall semester is over and for those who just graduated a few days ago, there are a lot of opportunities available.
What isn’t so great is the housing market right now. Not great for recent graduates at least, if you bought a home in 2000 and still live in it, you’ll have likely seen your investment double or in some places triple over the span of 16 years. Longtime homeowners have to be loving the rise in real estate prices (other than property taxes) while Millennials are basically priced out of the market.
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For the first time in the U.S., there are a greater number of 24-35 year olds living at home with their parents than in any other living situation at almost 33%. That’s approximately 25 million post-college aged adults who have their parents as roommates.
The three big factors behind Millennials moving back home include:
- Increased debt load – Student loan debt has been out of control for awhile.
- Higher housing prices – As mentioned above, the price of a house has at least doubled since 2000 while income in real terms has dropped for Millennials
- Lower credit scores – A low credit score can mean not getting a mortgage at all, or getting a high interest rate
Putting it all together kind of creates the perfect storm of not being able to afford your own home, especially if you are not married and have two incomes.
It’s hard to imagine the trend falling off anytime soon. College costs continue to rise each year, housing and rental prices are both marching ever higher, and home builders are increasingly focusing on high-end homes or multi-unit properties.