According to the Pew Research Center, more than one-fifth of adults ages 25 to 34 live with their parents or in other “multigenerational” arrangements, the highest level since the 1950s. You’ve probably heard enough stories about this trend by now to know it doesn’t just reflect a renewed interest in family bonding; these “boomerang children” are mostly moving back in with mom and dad (or grandma and grandpa) because of unemployment and economic hardship. In fact, the recession reduced the rate at which Americans set up new households by at least half, the Washington Post reports
This rise of multigenerational households—and correlated drop in new households—has ramifications beyond the personal. An estimated 2 million fewer homes are occupied than would have been had Americans continued to set up new homes and apartments at pre-recession rates. That’s a lot less people buying homes, paying rent, using utilities, buying home goods, etc. It’s a slowdown that has “broad implications for the economy,” the Post notes.
Housing has led the United States out of most of the recessions experienced since 1960, but if that vital industry is to significantly strengthen the current recovery, Americans are going to have to find their own homes at a more vigorous pace.
Although the number of new households began to recover in 2011, growth rate continues to lag behind its historic pace, according to Census Bureau statistics.
“It is hard to see what’s going to turn this around without better job and income growth,” said Daniel McCue, research manager at Harvard University’s Joint Center for Housing Studies. “But the way the job market is going, I don’t see any [immediate] change.”
Tuesday Quick Hits:
- For retirees, New Mexico could the “next Arizona.”
- Average 401(k) balances were 62 percent higher this year than the first quarter of 2009, according to Fidelity Investments. The stock market recovery and renewed commitment to saving has driven the increase, said Beth McHugh, vice president of market insights for Fidelity.
- While it’s certainly good news that retirement accounts are recovering recession losses, it lends support to New York Times financial columnist Joe Nocera’s recent assertion that tying retirement plans “to a risky stock market … is a recipe for disaster” (and part of the reason for his own lack of retirement savings).
- For decades, state governments lured workers with attractive pension plans, but budget problems have led nearly every state to revamp public retirement benefits to shrink long-term obligations. “The moves have triggered a legal and political battle over whether states are reneging on their promises to millions of public-sector workers,” the Associated Press reports.
- And the American Lung Association ranked America’s cleanest cities when it comes to ozone levels, smog and air quality. Santa Fe took the top spot for cleanest in all three categories; Bismarck, N.D., Duluth, Minn., Port St. Lucie, Fla., and Honolulu also ranked high.
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