Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
For young black Americans, it’s because rents are too damn high: For white ones, it’s about jobs.
So, why are more and more young adults living at home—and for longer stretches than ever before?
“The economy, duh!” is, indeed, the right answer. But it’s not the complete answer.
The 2000s have been rough, and the recovery after the Great Recession has has been sluggish and uneven. But economic forces triggered by the downturns during this time have manifested differently for young people of different races, a new study out of Johns Hopkins University finds. While white people got stuck in their parents’ homes because of job-related concerns; for black ones, the biggest obstacle was housing.
“Economic factors do not operate the same for everyone,” says Scott Holupka, one of the authors of the study. “Whenever we do these generalizations, we are missing a lot of the action.”
Using a rich, longitudinal household survey, he and his colleagues examined the conditions young adults faced in their metro areas with respect to rents, employment, and earnings between 2001 and 2013. That economically tumultuous period had wide-ranging effects across the American landscape, and so was a particularly intriguing one to study the effects of macroeconomic events on behaviors.
After controlling for the relevant factors, the researchers expected to find some evidence showing that parental wealth had a bearing on the propensity of young adults to live independently—especially since blacks of all ages are more likely to live at home to begin with. Surprisingly, the study detected none.
“We looked at income and wealth of parents compared to economic climate and we really thought we would be looking at a horse race between those,” says Sandra J. Newman, the lead author of the peer-reviewed study published in Journal of Housing Economics. “Intriguingly, parental income and wealth had no effect on either blacks or whites—but what influenced blacks was very different than what influenced whites.”
For black adults who were between 18 and 24 during the time period examined, a $100 increase in rent was likely to trigger a 5 percent drop in what the authors call “household formation”—the tendency to leave the nest. For whites, it only led to a 1 percent decrease. Put another way, blacks appeared to be five times more sensitive to rent, as a factor in their choice to move out of their parents’ home.
The housing crisis essentially turned America into a renter nation, triggering a steady upwards climb in rents. Young black adults, on average, made less than their white counterparts. And they tend to live in “segmented housing markets”—racially and economically segregated metro areas with more expensive housing markets that just got more expensive over time. All of this made the burden of moving out of their parents’ house and into a rental much greater for them.
“Locationally, when you look at where young adults lived, whites were kind of distributed across the country, blacks were more concentrated in particular areas,” Newman said. “Blacks do not have access to all locations and that's the historical, structural legacy.”
The effect of the labor market panned out differently. According to the study, the unemployment rate and the increase in staying with mom and dad went hand-in-hand for whites: A 1 percent drop on the first front led to a 1 percent increase on the second. For blacks, though, a 6 percent decline led to just a half-percent increase in living with mom and dad—a virtually insignificant blip.
The economy is improving and unemployment is at a historic low, so it’s likely that young, white people will move out of their parents’ home in greater numbers (non-economic factors not withstanding). What’s clear from this study’s findings, though, is that because the cost of housing keeps climbing higher, the same may not be true for their black counterparts.
“There's really no sign that increasing rent increases are abating any time soon,” Newman said. “So it's a cloud with no silver lining for blacks, because that still is a very big obstacle for them.”