Last week, Derek Thompson at the Atlantic unveiled a potentially devastating critique of the endless wave of trend pieces about the surge in young people living at home with their parents. The key is a single sentence lurking in the Census Bureau's reports on housing in America:
It is important to note that the Current Population Survey counts students living in dormitories as living in their parents' home.
Yikes. So is everyone wrong about everything? Fortunately, no. Housing economist Jed Kolko rides to the rescue with a definitive analysis proving that all your pre-existing biases are correct. There really are a lot more young people living with their parents today than there were ten years ago.
Two charts make it clear. First, the Census actually does let us separately track full-time college students from people who aren't full-time college students:
This shows pretty clearly that while it is true that many of the people counted as living with their parents are full-time college students (some of whom live in dorms, some of whom commute to a local school) the increase in living in home is being driven by people who aren't full-time students.
Still, is it possible that the surge is composed of a huge increase in the number of part-time college students? Maybe people are working a little, getting an associate's degree part-time, and living at home to save on expenses? Well, maybe. But here's a chart of what you might call older young people — it shows the exact same surge:
The best evidence, in other words, is that the conventional wisdom is correct. Due to high unemployment and sluggish wage growth, lots of young people who aren't in school don't have very much money in their pockets. And yet even though young people have less money today, rents are higher and mortgage lending standards are tighter. Higher costs plus lower incomes = growing need to economize, so more people are living with their parents.