Taking a page from the European model, many American families are staying together much longer than they have in the past. With many jobs drying up and more and more jobless claims every day, it is clear the economy has tanked and there is no relief in sight. Preparing for the future for many of these young people means staying at home and carving out a niche in some other employment arena other than what they are trained for.
Most children can’t wait to move out of their parents’ home, but in the modern day, as college graduates begin to realize how difficult the job market is, they are staying home longer and longer and causing more hardship for their parents as well as a strain on the economy itself. In a case of damned if you do and damned if you don’t, the reduced amount of people looking for new homes due to the fact that they are staying home longer is causing more damage to the economy in the long term. Without these people graduating from college and looking for a new house to live in, the real estate market bears the additional brunt of the economic downturn, in addition to the troubles that have already afflicted the market.
In Europe, this type of living situation is considered normal, and has been for quite some time. Only after World War II, when the American economy took off, was it considered normal for children to move out immediately after high school or college. In many cases, the flush economy made it possible for high school graduates to buy a new house, new car and move right in the day they graduate from grade school. Unfortunately, this was a highly unrealistic standard that has begun to grind to a standstill. Before World War II, the traditional home generally featured a very large family, including cousins, uncles, aunts and even grandparents. This was due to the fact that the home itself was very expensive and the economy was nowhere near healthy enough to put every single adult into their own home. Once the United States experienced the economic boom that occurred after World War II, it was easier and far more fiscally possible to purchase a new home right after high school.
Unfortunately, old habits die hard, as Americans continue to live beyond their means even as the economy crashes down around them worldwide. As United States citizens are forced to cut back, Europeans and other countries are not even surprised, as this has been a normal fact of life for centuries and isn’t likely to change in these locations. Outside of the US, large families lived together in often cramped spaces, due to the lack of available real estate. Only in America, Canada and similar countries are these massive tracts of land available, making it possible to build gigantic houses for relatively small families.
With the prohibitive fiscal policies put in place by a long line of irresponsible politicians, it has become blatantly obvious that the money simply isn’t rolling like it used to and, whether you graduate from high school or college, it might be quite some time before you can afford your own home. In addition, housing prices have traditionally risen at a pace that far exceeds the rate of pay for most people. Rent has grown higher, while wages have grown lower, creating a perfect storm for this type of housing situation.
In the future, it is very likely that the prices of real estate will come down drastically, as more and more empty houses sit on the market for an extended period of time. The chances of wages going up in the near future are slim to none, as any economist will tell you. Most marketing experts would call this a correction, as housing prices align themselves to a more reasonable level, in-line with current wages and middle-class incomes. Others might call it an end to the excessive lifestyle of the American citizen, where we can no longer own three cars and have two bathrooms in every home, whether we need them or not.
Children staying at home with their parents longer in order to save money as the American economy continues to flail will very likely be a recurring trend, as very few legitimate economists believe that the current fiscal state of the United States, and even the world, is going to improve anytime soon.