The American Dream of owning a home is suffering a failure to launch for many in Generation X and Y, and it’s not looking promising for the millennials either, according to a new study conducted by Emily Rosenbaum, Ph.D., professor of sociology.
“Since the baby boom generation, young people are far more likely to co-reside in somebody’s household than they are to own or rent,” said Rosenbaum.
The report, “Cohort Trends in Housing and Household Formation Since 1990,” is to be included in a new book published by the Russell Sage Foundation later this year, titled The Lost Decade? Social Change in the U.S. after 2000.
Rosenbaum studied several birth-based cohorts in terms of the housing market, beginning with the Great Depression babies on through to baby boomers, and ending with millennials, whom Rosenbaum refers to as the echo boomers—those born between 1986 and 1995.
“Cohorts matter because as they go through their lifecycles they go through different historical conditions,” said Rosenbaum, citing the Depression and World War II as examples.
Rosenbaum said that the conventional homeownership rate derived from U.S. Census data could produce misleading conclusions because it is based solely on households rather than individuals. Thus, that homeownership rate doesn’t take into consideration young adults who cannot financially strike out on their own who end up living with others.
To address this, Rosenbaum analyzed “headship” patterns, as well as home ownership. In other words, at what point in a person’s life cycle did he or she become the head of an independent household, and then possibly a home owner? When analyzed in this manner, Rosenbaum said, the evidence is overwhelming that recent generational cohorts face great disadvantages and that generational inequalities in home ownership are growing dramatically.
Rosenbaum supplemented her data with surveys from the General Social Survey, which is conducted every other year by the National Opinion Research Center and which asks a range of attitudinal questions.
“I use the survey data to isolate the cohort effect from the effect of the time period and the simple effect of age,” said Rosenbaum.
Rosenbaum noted that baby boomers were the first cohort since the Depression to experience unequal results, with more people competing for less housing. She said the effect has wide-ranging implications.
“Since the baby boomers had a tough time getting housing, they had to accommodate for the situation so they delayed marriage and having children,” she said. “Gen X and Gen Y also have similar problems, but the data I have shows that they exemplify economic insecurity—and the income for the next generation will be even worse off.”
In the concluding remarks of her report, Rosenbaum noted that though the data clearly reflects escalating housing inequality across generations, with recent cohorts (sometimes called Gen Z) doing much worse than their parents, the census doesn’t count people without a fixed residence. Those who hop from the couch of one friend to the couch of another don’t get counted at all, so the true extent of the gap may be hidden.