He's 24. He's got a job. He's still living at home.
My friend Cathy is beyond frustrated. Her son is not helpful around the house. She's tired of asking him to take out the garbage, empty the dishwasher or run an errand--in the car she and her husband are providing.
Part of his inertia is his job history over the past four years. A graduate of a high-tier college where he got more-than-respectable grades, he's taken internships with nonprofit organizations--even worked one that involved relocating to a destitute Central American country for a year--but doesn't feel he's on a career path. The current job is not in his field and is only a one-year contract. He's applied to graduate school and hopes to go next year. So right now he's feeling immobilized--despite his parent's suggestions that he have a plan B for living arrangements: They may sell the house this summer and move closer to the dad's job.
It may not ease her frustration to know that her son is part of a recent trend: the ever-so-slow growth in household formation. It's not only frustrating for those of us with adult children living at home, it's also a drag on the economy. Each time a household is formed, it adds about $145,000 to output that year as the spending ripples through the economy, according to an estimate last year from Mark Zandi, chief economist at Moody’s Analytics [as reported in the New York Times].
Over the last year, household formation has been picking up as this map from the New York Times indicates.
Source: Census Bureau, via Haver Analytics.The pickup, the Times reports, "is probably related to job growth, which has enabled multi-generational households to spin off into multiple new homes."
The overall trend is good news for Cathy. Her son may be forced to move if she sells her house and will certainly move if he gets into graduate school [he's applied to schools one and two time zones away] and may even be heartened to move out by his improved chances in an improving job market.
“They can only live with their parents for so long," Zandi noted. "There are powerful centrifugal forces in those households, on both side. As soon as they have a chance to get out, many will take it.”
All of which could help Cathy feel better about putting her house on the market--That is, if her second son, graduating from college this spring, finds a more favorable job market than his brother did. It's still too soon to "amen" to the pressures of the re-nesting stage.
