There is an interesting demographic shift underway in the USA and it has profound implications.   

In a recent Pew Center poll it was revealed that 78% of people between the ages of 25 and 34 have lived with their parents for an extended period of time after they turned 25.  Currently almost a quarter of people between the ages of 25 and 34 live with their parents and that is more than twice the number that did so in 1980.

The major reason for this change is economic as many of those in this situation have not been able to make enough money to start their own households but the studies show that only about 30% are living with their parents because they can’t afford to live on their own.   The other 70% could live elsewhere but choose not to. Even more startling is that almost 15% of those who are living at home are married or in a committed relationship and their spouse is living with them as well. Those helicopter parents seem to be getting what they deserve.

Analysis:  Beyond the impact of the new living arrangement on the psyche of the family there are the economic implications – especially to the housing market and to retail in general. The pattern of the past fifty years has been that children fled the confines of the parental nest at their very earliest opportunity and thus provided the market for rental housing as well as starter homes.  They began families and the progression was underway. Now they are not moving out and rental units go unused. There is far less interest in home ownership within this cohort and families are started far later in life. The whole process that drove home ownership has been disrupted.  

The retail and entertainment sector is enjoying this trend as there are now legions of young people unburdened by rent or mortgage payments, utilities and even food.  They have the spending orientation of teenagers but with the income of adults.  They are able to spend on clothes, bars and travel and do.

The big question is how long the parents can maintain their commitment to extending their progenies youth.  Do the statistics from ten years in the future show that “kids” are still living with Mom and Dad in the retirement community?

Courtesy of Dr. Chris Kuehl, Armada Corporate Intelligence  –  Dr. Kuehl is a Board Member of BIIA