Helping millennials find a home of their own

For what seems like ages, the media have depicted young adults who live with their parents as losers who lack initiative and drive, living in the basement as they freeload off the generosity of their families. However, a surprising number of millennials have found themselves living with their parents even as they work tirelessly to make ends meet.

According to a recent study conducted by the Census Bureau, just over 30 percent of 18- to 34-year-olds in the U.S. live at home with a parent. It’s a big jump from recent years; in 2000, 23.2 percent of those in the millennial age bracket lived at home with a parent.

But the issue is particularly a problem in Miami. A Miami New Times article published earlier this year indicated that the percentage of millennials living at home in South Florida is a staggering 41 percent, the highest in the nation.

There’s a number of reasons for this. Recent graduates are increasingly burdened with unsustainable levels of debt and the recession stymied wage growth and job prospects for many millennials.

While the recession technically ended several years ago, many young adults must grapple with low wages and underemployment. Living at home allows young adults to find their footing in a career and helps delay the financial burdens of renting or owning a home.

But the experience of living with parents seems different in Miami than in other cities, likely because it is so pervasive. Some of those reasons are cultural, others are socioeconomic.

According to a Pew Research Center study, second-generation millennials (those born to one or more immigrant parents) are significantly more likely to live at home with their parents than those with native-born parents (48 vs. 37 percent). As the Miami-Ft. Lauderdale metro area has the highest percentage of foreign-born residents in the country (36.9 percent according to the U.S. Census), this would likely explain some of the disparity.

Another Pew study found that one out of every four Hispanic and African-American households in the U.S. lives in a multi-generational household versus just 14.3 percent of non-Hispanic white households. Miami-Dade County has a significantly higher percentage of Hispanics and a slightly higher percentage of African Americans than the national average, so this too would also explain the high percentage.

But there are other factors at play. A recent Trulia study cited by the Sun Sentinel stated that the cost of buying a home is 50 percent cheaper in South Florida than renting. Unfortunately, many millennials are more likely to put off home ownership for numerous reasons, including greater flexibility for relocation, lack of savings for a down payment and lack of available lending from banks.

Even when millennials may have the savings set aside for an apartment, they are often competing with all-cash buyers, which is twice the national average, making them less desirable to home sellers. This has left many young adults to compete in the white-hot rental market, where sky-high demand has increased prices rapidly.

While one would think that this would have a relatively harmless effect on the economy, it’s actually hampering it in a significant, if subtle, way. When children out of the home, they invest a significant amount of money on everything from rent, furnishings, insurance, home goods, contract labor and more. Those expenses add up quickly. One individual can easily spend thousands of dollars on their first move.

Moreover, they also delay major life decisions, such as marriage or having children, which both help create happier residents and spur the economy.

Bloomberg Businessweek reported that one reason the economy has been slow to grow was the lack of new household creation, which has slowed down exponentially compared to previous recoveries. The New Republic also reiterated this sentiment, reporting that “a ‘kids living in the basement’ economy simply has no vigor.” While our city's economic growth has been strong compared to other large cities, there’s no doubt we can see even more growth when more of our young adults from households.

There’s no doubt there are benefits for millennials living at home and many of them enjoy it. But many are also not living at home by choice and want to become independent. However, they’re stymied by factors like housing costs that make moves prohibitive.

Our city has grown up. We need to find solutions to get more of the 41 percent of our city’s millennials out of their childhood bedrooms and into their own homes.

This story was originally published July 22, 2015 at 6:53 PM with the headline "Helping millennials find a home of their own."