The three series tend to follow similar if far from identical courses, most recently with the big drop-off in household formation and housing starts during the housing bust and modest recovery in early 2010s. Over the past five years, though, the ASECS survey has been showing a tailing off of household formation while the Housing Vacancy survey and housing starts have been showing an acceleration. We probably shouldn’t take the 2020 numbers from either survey too seriously, but the divergence was apparent before then.

The upward trend does seems a bit more likely to be real, given that the other annual estimates of household formation, from the American Community Survey, also show a rising trend line through 2019. There’s also the unmistakable evidence of a real estate boom in 2020, with new-home sales rising 20% and existing-home sales 5.6%, both reaching levels not seen since 2006.

But while some of 2020’s home buyers were new-household-forming millennials, most weren’t. The average age of buyers rose to an all-time high of 55 in 2020, according to a National Association of Realtors survey, the 31% first-time buyers’ share was the lowest since 1987 and the 22% of first-time buyers moving directly from a family member’s home (forming a new household, that is) also represented a decline from previous years. According to a recent Apartment List analysis of CPS data, millennial home-ownership rates have risen sharply over the past five years — which you’d expect as more millennials age into their 30s — but continue to lag those of previous generations. At age 30, 42% of millennials own homes; for gen X that was 48% and for baby boomers 51%.

This could signify a lot of pent-up demand. “There would be some 5.7 million additional households today if Americans formed households at the same rate they did in 2006,” Zillow Group Inc. economist Jeff Tucker wrote in December, “a testament to widespread difficulties in securing affordable, accessible housing over the past decade-plus but also a potential indicator of enduring housing demand to come.” Then again, those “widespread difficulties in securing affordable, accessible housing” could persist and possibly worsen as tight supply and rising demand drive up prices. As the millennials-focused Business Insider pithily summed up in a headline this week, “Millennial homeownership is causing the US to run out of houses.”

Near the beginning of this column I wrote that “household formation drives demand for housing,” but it’s clear that over the past decade-plus the supply of affordable and appropriate housing has to a large extent driven household formation. Inadequate new construction in and near places that created lots of jobs, such as New York City and the San Francisco Bay Area, drove prices so high that it was hard for even well-paid young workers there to strike out on their own. Meanwhile, the houses that were being built around the country grew increasing large and out-of-range for first-time buyers, with the share of new single-family homes with four bedrooms or more rising from 18% in 1985 to an all-time high of 47% in 2015 even as average household size fell.

The pandemic did make all those extra bedrooms seem a bit more sensible, both as home offices for remote work and as refuges for adult children fleeing locked-down cities. It’s also possible that the grand experiment in working from home that Covid-19  unleashed will break through some of the housing logjam for millennials, both by reducing real estate prices in super-expensive cities and making it easier for young professionals to do big-city jobs while living in less-expensive locales.

There are even some extremely modest signs that this is happening: The percentage of 18-to-29-year-olds living with their parents has been rising since the 1960s, according to a Pew Research Center analysis of census and CPS data, and reached an all-time high (going back to 1900) of 52% over the spring and summer. But more recent CPS data-crunching by Harvard’s Joint Center for Housing Studies found that by October the percentage of 25-to-29-year-olds living with parents had actually fallen below 2019’s levels (the 18-to-24 living-at-home percentage remained elevated because so many colleges and universities were still operating remotely). Maybe some of them got a good deal on a Manhattan apartment!

The story of millennials and housing has so far mainly been one of disappointed expectations, though, so I wouldn’t get too excited just yet. One big issue is inequality. To quote another recent Business Insider headline, “The millennial wealth gap is growing as some flock to buy houses and others give up on homeownership entirely.” The new opportunities presented by remote work are largely reserved to college graduates, while even much-cheaper apartments in expensive cities are still too expensive for most. According to Zumper’s latest rent report, the 24.3% year-over-year drop in asking prices for San Francisco one-bedroom apartments still leaves a median price of $2,650, which over a full year adds up to 75% of the $42,212 median income of U.S. 25-to-34-year olds. Meanwhile, in many cheaper cities away from the coasts, rents are up by 10% or 20% over the past year. For many millennials, the economics of striking out on one’s own remain pretty daunting.

Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of The Myth of the Rational Market.

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