Friday, October 24, 2008

Boomer Sociology and Housing Demand

One of the factors driving the boom in United States housing construction over the past decades has been an under-appreciated sociological phenomenon: the atomization of the American family. Once upon a time, it was perfectly normal for multiple generations to live within the same household. But the American ideal changed: After World War II, the expectation was for every nuclear family unit to live in its own abode. Gramps and Granny live in their own place, mom and dad in their's. And as soon as Junior and Missie become financially independent, they move out and live on their own as well.

Atomization of the family has driven an increase in the number of households, which in turn has increased the demand for separate dwelling units. No matter how small the household, every abode needs minimal accommdations like a kitchen, bathroom, bedroom and dining room. A consequence is that the average dwelling size is larger than ever. Combine this with the trend toward McMansions for the affluent, and the median floor area of a new single-family house sold in the United States has trended steadily higher since 1982: from 1,630 square feet to 2,235 square feet in 2007 -- a 37 percent increase in 25 years.

As Americans have discovered in the past year, however, housing is not always a great investment. It's really a form of consumption. As Americans look for ways to cut expenses and save more money, one place they'll examine is where and how they live -- and with whom they live.

In a recent posting, "More than Roommates, Less than Lovers," we noted an emergent phenomenon of Baby Boomer women -- widows and divorces for the most part -- moving in together for reasons of economy (maintaining one house instead of two) and companionship.

That's not the whole story. I haven't uncovered any hard numbers yet, but the number of adult children in the United States living at home -- the so-called "boomerang" effect -- appears to be on the rise. As an indirect measure of the phenomenon, I would note that key words "adult children living at home" generate 2.1 million Google hits. Dr. Phil has addressed the topic on his television show, there is a website devoted to the theme,, and Web is ablaze with advice on how to handle the problems that ensue from two adult generations living under the same roof.

Now comes a survey from Canada, where the trend apparently is far advanced. In a survey of young adults (18 to 24), global research firm Synovate has found that 40 percent live with their parents. That compares to 49 percent globally. (I recall hearing that the number runs as high as 75 percent in Italy.)

I don't know if 40 percent of young American adults will wind up living with their Baby Boomer parents, but the survey suggests that there is precedent in a neighboring, culturally similar country for the number to rise. It would be foolish to assume that the sociological underpinnings of the demand for housing will continue to trend the same direction that it has for the past 60 years. If the atomization of the American family reverses itself, or if households reconstitute themselves around non-kinship groups, our existing housing stock can stretch a lot further.

This is bad news for the housing industry. As children live longer with their Boomer parents, as more single Boomer women merge households to economize on housing expenses, as Boomer households morph into new forms, demand for housing could remain depressed for years.
(Image credit:


Carol Orsborn, Ph.D. said...

While this phenomenon of adult children returning home may hurt the housing market, there is a sociological upside. In times of difficulty, such as recession, the ideal of independence becomes tempered by the need for increasing cooperative co-dependency (not in the 12 step sense, but as in human beings seeking comfort and community: the best humanity has to offer.) This may be an important sociological/anthropological/psychological corrective to the value we've placed as a society on the lone ranger conquering unexplored territory: the cowboy spirit we're happily leaving behind. I think a parent and adult kid can make it work well for all under certain circumstances without it being some kind of deviation or backsliding. I'm not in this situation with my adult kids, but I am helping out more and as I can--and take comfort knowing they'll be there for me, as well. By the way, one of the places we're talking about these types of things is over at, a peer-to-peer website for women 50+.

Jim Bacon said...

Carol, I agree that there is a potential psycho-sociological upside to adult children living at home... as long as they don't prolong an unhealthy dependency. My 24-year-old daughter is living at home with her mother (my ex) while she studies to be a nurse. It's a temporary situation, but it works out really nicely for everyone while it lasts.

As for the housing market, I'm indifferent to what happens. The housing market is no more privileged than any other sector of the economy. In fact, Americans have way over-invested in real estate over the past several decades, incurring huge financial liabilities and creating a housing infrastructure that will be exceedingly expensive to heat, cool and provide with public services. I would argue that adult-kids-at-home trend is economically beneficially as well.

Groveton said...

Jim Bacon the human settlement guru raises his head with the over-investing in real estate remark. I had to wonder when it would happen.

Valuable Insights into the Hearts, Minds and Wallets of Today's Baby Boomers

This blog is by the authors of Boomer Consumer: Ten New Rules for Marketing to America's Largest, Wealthiest and Most Influential Group, on sale now.

Here is where you'll find information referenced in the book, as well as updates, news and perspectives from Matt Thornhill and John Martin, founders of the Boomer Project.