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Study: Staying at home longer to become homeowners
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There is a positive link between the age at which a young adult leaves the parental home and the likelihood that they become homeowners, but only until about age 25, according to a new study published today in Canadian Social Trends.
Compared with previous generations, today's young adults are more likely to live with their parents well into their 20s or return to their family home after an initial departure. One explanation, sometimes suggested in media reports, is that young people want to save money towards the purchase of their own home.
Yet the relationship between staying at home longer and eventually owning a home is not that clear, according to a new analysis of data from the 2006 General Social Survey on family transitions, published today in Canadian Social Trends.
According to the study, there is a link between the age at which a young adult leaves the parental home and the likelihood that they become homeowners, but only until about age 25. After age 25, the likelihood of being a homeowner when they are in their 30s declines. This conclusion remains the same even after taking account of various factors associated with the likelihood of being a homeowner (such as income, employment status, having a spouse and children, and place of residence).
About two-thirds (67%) of young adults who had left the parental home at 18 or 19 reported owning their own home in their 30s. The proportion was almost three-quarters (74%) for those who had left at 24 or 25.
Beyond age 25, the later their age at departure, the lower their probability of being a homeowner in their 30s. Among those who did not leave their parents' home until they were 28 to 30 years old, only 61% owned their own home in their 30s.
A similarly low ownership rate was reported by those who left the family home when they were very young. Only 61% of young adults who left at age 16 or 17 were homeowners when they reached their 30s.
The link between home ownership and young adults who return to live in the parental home is more complex. As a whole, these so-called "boomerang kids" are just as likely to be homeowners eventually as those who leave their parents' home only once.
However, for boomerang kids, the likelihood of owning a home depends on their reasons for returning to live with their parents. Those who returned because they lost their job or were having financial problems were much less likely to be homeowners in their 30s than those who never came back home.
On the other hand, young adults who "boomeranged" because a relationship ended or because they had finished their studies were no less likely to become homeowners than those who never returned to live with their parents.
Other explanations cited for why young people delay leaving (or return to) the parental home include the prolonged period of education, accumulation of debt, the temporary nature of jobs often held by young people, and delayed formation of couples.
Definitions, data sources and methods: survey number 4501.
The study "Staying at home longer to become homeowners?" is in the December 2007 issue of Canadian Social Trends, Vol. 84 (11-008-XWE, free), now available from the Publications module of our website. A paper version (11-008-XPE, $24/$39) is also available.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (613-951-5979; sasd-dssea@statcan.gc.ca), Social and Aboriginal Statistics Division.
