Five years into the economic recovery, things are looking up for young adults in the U.S. labor market. Unemployment is down, full-time work is up, and wages have modestly rebounded. But, according to a new Pew Research Center analysis of U.S. Census Bureau data, these improvements in the labor market have not led to more Millennials living apart from their families. In fact, the nation’s 18- to 34-year-olds are less likely to be living independently of their families and establishing their own households today than they were in the depths of the Great Recession.
In terms of sheer numbers, there are more young adults today than there were when the recession hit – the 18- to 34-year-old population has grown by nearly 3 million since 2007. But the number heading their own households has not increased. In the first third of 2015, about 42.2 million 18- to 34-year-olds lived independently of their families. In 2007, before the recession began, about 42.7 million adults in that age group lived independently.
The declining numbers reflect a decrease in the rate of independent living during the recovery. In 2010, 69 percent of 18- to 34-year-olds lived independently. As of the first four months of this year, only 67 percent of Millennials were living independently. Over the same time period, the share of young adults living in their parents’ homes has increased from 24 percent to 26 percent.
Meanwhile, the national unemployment rate for adults ages 18 to 34 declined to 7.7 percent in the first third of 2015, a significant recovery from the 12.4 percent who were unemployed in 2010. Other standard benchmarks also demonstrate that nationally the young adult labor market has strengthened. Both job-holding and full-time employment have increased since 2010. In addition, median weekly earnings among young adult workers are up marginally: $574 through the first four months of this year, up from their 2012 low of $547.
In spite of these positive economic trends and the growth in the 18- to 34-year-old population, there has been no uptick in the number of young adults establishing their own households. In fact, the number of young adults heading their own households is no higher in 2015 (25 million) than it was before the recession began in 2007 (25.2 million). This may have important consequences for the nation’s housing market recovery, as the growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations, and other ancillary purchases that accompany newly formed households.