In recent years, America has been shifting toward a more renter-based society – but not necessarily by choice. Across the nation, housing costs are rising at a faster pace than incomes; as a result, more adults are doubling up in order to afford the rent, especially in states like California and New York where rents are increasing the fastest relative to income.
The Zillow research team looked at the numbers behind this phenomenon to determine how it has impacted the national housing landscape. The results are significant: from the year 2000 to 2012, the number of working-age Americans sharing a home rose from less than a quarter of the adult population to more than a third.
During that 12-year span, the median household size increased from 1.75 adults per household to 1.83 adults. In practical terms, that means there are now 5.4 million fewer households than there would have been if the average number of adults per household stayed at year 2000 levels.
Doubling up is defined as working-age adults who are not married or in a partnership moving in together and combining incomes in order to afford housing – it includes both renting with a roommate and moving in with parents. Metro areas with the greatest share of adults in doubled-up households are New York, Los Angeles and Chicago.
“There is a silver lining behind this data,” said Zillow Chief Economist Dr. Stan Humphries. “Like a coiled spring, all of these doubled-up households represent tremendous potential energy for the market.”
With so many possible new households across America hidden within existing, joint households, there’s a lot of potential rental and home buying energy on the horizon. As incomes rise or housing costs normalize, these doubled-up households will most likely split off on their own, with individuals moving into separate rentals or entering homeownership.