Young Adults may Finally be Moving into Own Homes

There is one number, often overlooked, that affects the growth of the housing sector as much as any other—the percent of the 25-to-34-year-olds who are working. Many of these young adults continue to live at home, which holds down household formation. As their employment numbers grow, they are more likely to move out and form households, buying housewares to furnish their homes, which further spurs the economy.

As informs, prior to the housing bubble young adult employment was in the 78-80 percent range, falling to 73.5 percent during the recession, and finally rising to the 75 percent range in 2012. As Jed Kolko, Trulia‘s chief economist and vice president of analytics, reports, last month that number hit 75.9 percent after fluctuating around the 75 percent mark for nearly two years. But, he says, it takes a while for that effect to impact the housing market: “It would be hard to get a lot of new household formation without a better jobs picture,” he adds. While the increase does not seem like much, each percentage point represents 400,000 jobs. ##

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