A recent study by the National Association of Home Builders (NAHB) has revealed that more than half of Millennials are “boomerang Millennials,” meaning they initially move out of their parents’ home only to move back in. Because Millennials are a key demographic for the housing market, this study could have important implications for housing trends in the coming year.
The NAHB study identifies a “re-launch” as the occurrence of a young adult moving out of their parental home, returning later and then moving out again. The analysis revealed a higher occurrence of “re-launch” for Millennials who held a bachelor’s degree compared to those with a low level of education. Additionally, the examination revealed a higher occurrence of “re-launch” for Millennials whose parents attained a higher income compared to those with lower parental household income.
While this study may indicate that this group is delaying the milestone of “officially” moving out, other resources have indicated that there is a pent-up demand in Millennials to find their own homes. Overall research about Millennials indicates a growing demand in the housing market in the years ahead, but it is important to understand the characteristics of those who return home and to gain insight into the timing of their moves.
Several important differences were identified concerning boomerang Millennials. The study showed that 90 percent of those born between 1980 and 1984 left home before age 27, but more than half returned to their parents’ homes. Within that group, 55 percent of those with a bachelor’s degree or higher returned home, while 42.1 percent of those with a high school degree returned home. In terms of parental income, the study revealed there was a higher occurrence of “boomerang Millennials” for parents with higher income distribution. Additionally, 12 percent of men in this age group never left their parents’ homes compared to 7.6 percent of women. While women are more likely to “boomerang,” they are also more likely to re-launch by leaving again.
Studies of Millennials continue to show that this group has a strong desire to own a home. Despite the NAHB analysis of the “boomerang” effect, Millennials remain a key demographic in the housing market, indicating that the pent-up demand will likely translate into housing growth in the coming years.