Young Adults Delaying Parenthood, but By Late 30s Same as Prior Generation

Friday, January 13, 2017 by Zelman & Associates

We define the Millennial generation as individuals born between 1984 and 2002 (14-32 years old), making them 14% larger than the prior 19-year age cohort, which is the most important measure from our perspective when considering the impact on housing.

Although little debate exists that the Millennials are a strong tailwind to housing demand, the type and location of this housing that these individuals will ultimately choose is more openly debated. Some believe that urban, multi-family environments will take share while others believe that the suburbs are as attractive as ever. In our opinion, children are the starting point to answering this question as households with children are 20-30% more likely to live in a single-family unit than those without children.

To put some perspective around this topic, we calculated the share of young adult households that had children in 2015 by age cohort and compared it against 1990, 2000 and 2010. For example, in 2015, 40% of 25-29 year old households had a child, down consistently from 48% in 1990. For 30-34 year olds, 58% of households had a child in 2015, lower than 61% in 2000 and 2010 but we find it noteworthy that the trend was stable between those two decades and was likely pressured lower of late by the recession.

However, for 35-39 year olds, the share of households with a child has been virtually unchanged over this period, with 2015 at 70%, on par with 1990 (71%), 2000 (69%) and 2010 (70%). This suggests to us that while family formation and child bearing has been increasingly delayed by young adults over the last several decades, they appear to be ending up in the same place as their predecessors, which we interpret positively for the single-family sector.

Young Adults Delaying Parenthood, but By Late 30s Same as Prior Generation

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