According to real estate data site Zillow.com, the number of working-age adults rooming together – i.e., sharing a residence without any romantic connections – is on the upswing, coming in at a surprising 30% of adults, up from a low of 21 percent in 2005 and 23 percent in 1990. Some subgroups are much more likely to do so, including adults ages 23-29 (54 percent) and those in the most expensive cities, including Los Angeles (46 percent doubled-up), Miami (41 percent), and San Francisco (38 percent).
This certainly lines up with home ownership rates, which hit a low of 62.9 percent in 2016. The last time they had been that low was in 1965! That number is down from a high of 69.2 percent in 2004.
One of the reasons for that decline in home ownership rates is the increase in home prices. Home prices are at their highest levels in history, currently even higher than at the height of the housing bubble of the last decade.
It also makes sense given the ongoing increases in rent costs. According to the St. Louis Fed, the Consumer Price Index for urban renters has gone from 181.1 to 312.67 just since the turn of the new century.
To wrap up this analysis, understand that the median personal income is up only slightly from the turn of the century, currently at $31,099 compared with $29,998 in 2000.
So yes, Zillow’s conclusion – that this trend is being driven by affordability concerns – seems to be right on the mark. The question is, what’s going to happen to reverse this trend? Or will we continue to see rooming levels rise as people are able to afford less and less?