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No Commitment to Mortgages and Renting in Metro’s Becoming More the Rule
More than half of Americans are single, according to a report by economist Edward Yardeni, President of Yardeni Research Inc. The report, titled “Selfies,” states that the percentage of single Americans have inched up from 37 percent in 1976. The report presumes that the economy’s underpinnings will change because of what an increasing single household population means: fewer parents and home-owners.
One benefit of living single is having the elasticity to move to more viable job markets; employers tend to like this flexibility when job assignments relocate. Singles are less likely to own a home or have kids and therefore are not obligated to stay in a particular area. The local start-up economy usually benefits in that single people are more likely to become entrepreneurs.
The housing market is affected the most by the increase in single households. Recent housing data shows that while the number of starts are higher overall, multi-family rentals account for the majority of the increase in housing starts. The need to engage Millennials to buy homes has been written and talked about a substantial amount. This demographic certainly have idiosyncrasies when it comes to home-ownership; but many are simply waiting later to form families and purchase a home.
The other side of living single is that this type of household is more economically delicate. With only one source of income, single households can be more economically fragile during times of illness, unemployment and injury. This doesn’t bode well for the economy as a whole because single households are more likely to cut spending during times of household economic stress.
The Yardeni and Census Bureau data shows the causal relationship between falling marriage rates, increasing single households (men having the biggest increase in single living) and the sputtering housing market. Will we see decreasing housing activity with the increasing number of single households? It may depend on the type of single household, which is similar to the married household. The ‘unmarried, but living together’ household has dramatically increased over the past decade and just as the traditional married couple, are buying homes.
Bloomberg BusinessWeek. Most Americans Are Single, and They’re Changing the Economy