There is encouraging news for the parents of "boomerang" millennials: Hang on; your children may soon be in a position to move out.
A recent study by Harvard University's Joint Center for Housing Studies is forecasting that millennials -- who have supplanted baby boomers as the largest and most diverse generation in history -- will, by sheer numbers alone, boost the demand for housing. The number of households in their 30s is projected to increase by 2.7 million over the coming decade.
"Ultimately, the large millennial generation will make their presence felt in the owner-occupied market, just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive quarter," Daniel McCue, research manager of the Joint Center, said in a statement.
But parents of millennials will have to wait a little longer. The housing industry has yet to fully recover from the economic collapse and subsequent recession. More than 35% of Americans spend more than 30% of their income for housing.
Millennials, facing a challenging job market and saddled with unprecedented student loan debt, continue to live with their parents, the study further notes. Some 2.1 million more young adults in their 20s lived with their parents in 2013, while student loan balances increased by $114 billion.
Mounting student loan debt will continue to delay homeownership for millennials, the study forecasts. Student loan debt comprised almost two-thirds (63%) of the growth in total debt over the past year and for nearly the entire increase in non-housing debt since 2003, according to the study.
Another key to maximizing millennials' potential to right the housing market is economic growth to the point where incomes start to rise.
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