The recent Census revealed that Americans are less mobile now than they were 10 or even 50 years ago. Household mobility — moving from one place to another — has hit a lull since World War II times. Urban centers with high-tech colleges gained the biggest numbers, pointing to the fact that growing cities attract post-college grads who need work. Places like Raleigh, N.C.; Houston, Texas; and Baltimore, MD, among others, drew a lot of young talent in 2008-2010. Even after the economy recovers, these cities will continue to bring in new residents, while other regions may suffer if they fail to offer young people opportunity and lifestyle, says William H. Frey, a Brookings Institution demographer.
A new paper authored by Daniel Jerrett and Onsel Emre, fixed-income analysts at Putnam Investments, further suggest that Gen Y individuals hold one important key to the economic recovery. Household formation — when children move out of their parents’ house, individuals marry, or roommates/couples go their separate ways — has dipped nationally, probably as a result of young adults choosing to live with their parents longer or staying put out of financial necessity. But the numbers may be bottoming out.
Jerrett and Emre are hopeful that Gen Y will boost the economy as they move into their own apartments or multifamily units. Recent data has shown that these categories, over single-family housing, were largely responsible for September’s housing starts. Twenty-somethings can’t stay in the nest or with their old roomies forever. Their mobility, albeit latent at the moment, could soon spark housing in a very positive way.