MacroMonitor Market Trends Newsletter November 2020
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Boomerang Kids: Young Adults Who Return Home
At the beginning of September 2020, Time Magazine reported a disturbing finding from an analysis of the Current Population Survey data by Pew Research. The proportion of young adults between the ages of 18 and 29 living with at least one of their parents (52%) has surpassed the previous record set during the Great Depression in 1940 (48%). As of July 2020, Pew reports 26.6 million young adults are Boomerangs—children who have left home and returned.
Various reasons are given for Boomerangs' return—money is the major consideration for a move; in April and May alone, 40% of workers age 18 to 29 lost their job or took a pay cut. Although jobs are being added, an analysis of BLS data by The Balance reports that to date, many more positions have been lost than gained. Projections are that some business sectors will not recover until 2023. With continuing employment uncertainty, few Boomerangs will be in a position to move out any time soon.
A trend of MacroMonitor data establishes some baseline numbers for comparison with 2020–21 data due in January. Between 2002 and 2018, the number of Boomerang HHs has increased from 7.9 to 15.1 million. Evidence of the 2007-2011 Great Recession is seen in the following chart; many HHs retained a Boomerang. Data from MRI-Simmons show that more young men than young women tend to remain 'at home'.
The setback suffered by Boomerangs is only half of the story. Generally, Boomerangs are a middle-class HH problem; roughly two-thirds have annual incomes between $50K and $150K. Troubling is that one-half of HH heads are between the ages of 50 and 70—approaching retirement or recently retired.
Learn more about Boomerang households and how well they're prepared to assume the financial responsibility of another adult.