A new study shows that the American dream is changing for young people.

The Urban Institute tracked not only homeownership, but household formation and household headship and found that the number of young people (between 20 and 28 years old) who are heads of households is on the decline, and in fact, it is at the lowest levels seen since 1960.

While this is often described as a new trend among Millennials, who often opt to stay in their family homes rather than move out, it is actually a return to older headship trends.

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Prior to roughly 1980, most young people lived at home with their parents until they married. Later in the 20th century, the women’s movement and a rising age and prolonging of first marriages led more young people to move out on their own. However, with the economic downturn, many young people, despite a desire to move out and form their own households, are living at home longer.

However, the total number of households is increasing. In particular, as Baby Boomers age, senior households are on the rise. Household formation in general is up, too—despite persistent economic difficulties.

On the other hand, homeownership, once seen as the ultimate goal and American dream, is on the decline. Homeownership rose drastically from the early 1990s on, only falling into a decline with the recession. Unlike the changes in household formation, the study finds that young adult homeownership numbers, and homeownership numbers in general, are unlikely to ever return to the peak numbers of the early 1980s.

The study goes on to predict that the majority of new households, in both the 2010s and 2020s, will be renter households as opposed to homeowners. When the housing bubble burst in the early 2000s, it greatly shook Americans' faith in the virtues, or even the necessity of owning a home. And, with the much-discussed trend of younger people changing jobs frequently, declining a mortgage can look like good sense.

The groups that are buying more and more homes are American minorities. In particular, homeownership among Hispanic Americans is on the rise, leading to a surprising “gap” in Hispanic homeownership figures as compared with African Americans. In fact, Hispanic homeownership is so far on the rise. It’s predicted that 47 percent of new homeowners between 2010 and 2020 will be Hispanic families.

While there are obvious explanations for the rise in senior households, namely the large percentage of aging Baby Boomers living on their own, the racial elements of new homeownership numbers are more complex. A more thoroughly race-based study of householders and homeowners—taking into account various economic, political, and cultural factors—could shed some light on shifting racial demographics in American households.

Urban Institute - urban.org

Related:

Millennial Parents Are the Poorest in Decades

Why Millennials Change Jobs​