Looking for a New Year’s Resolution? How about getting your adult children or ( 34 year olds ) to finally move out of the house? The economy is looking up (at least, so they say) and job growth continues an upward trend—the time couldn’t be better, right?

Not so fast.

Goldman Sachs released a report yesterday looking at the root causes for still high percentage of 18 – 34 year olds still living at home. The share of young people living at home climbed 4% between 2006 and 2012. This was understandable given the recession, but the harsh reality is that the number hasn’t significantly declined since the recovery.

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The stats seem troubling from the outset, but the report also finds that the percentage of young adults still living at home is actually relatively low in the U.S. compared to other industrial nations. Only Finland, France, Great Britain and the Netherlands have a lower concentration of 18 – 34 year olds living at home than we do.

What’s the driving force behind cohabitation with parents? Goldman Sachs attributes it to labor market conditions. The higher the percentage of people “Not in Employment, Education or Training” (NEET), the higher the share of young adults living with their parents.

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In the U.S., Goldman Sachs points to two interesting phenomena: First, despite a stronger job market, the number of underemployed young adults has continued on an upward trend during the economic recovery. Second, the share of underemployed youth living at home was actually on an upward trend even before the recession. That leads the research team to believe that economic cycles only are one part of the story; that cultural factors are also playing a role in this trend. Simply, it’s no longer looked down upon to be living in your parent’s basement even when you’re 30 years old.

The long term impact, some fear, is that this trend will depress household formation and housing demand—thereby dragging down the economy in the process.

Unlikely.

Even Goldman Sachs noted that the demand for housing is far outpacing supply. “As we explained before, population growth alone is likely to contribute about 1 million households per year over the next few years. Population aging may add another 100k households per year as older individuals are more likely to live independently than younger individuals,” the report states. “Therefore, our baseline forecast of 1.1-1.2 million household formations—which should lead housing starts to 1.4-1.5 million assuming 300k annual demolitions—does not depend on many young adults moving out of their parents’ homes.”

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A few critical pieces of information seem to be missing from the Goldman analysis, though.

First, this is a demographic that’s saddled with more debt than any generation of the past. Student loan debt is crushing young adults, many of whom took on $100k+ in artificially low-cost loans to earn degrees worth little more than the paper they’re printed on. They’ve then entered the job market during a time where wage growth is not only slow, but the growth that’s happening is in the bottom-end of the market in low-skilled, low-wage jobs—barely enough to keep up with student loan payments. It’s no wonder they’re living at home. They have no choice.

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Then there’s the very real issue that the housing market has rebounded so quickly and so strongly in some markets (thanks again to cheap debt) that 18 – 34 year olds simply cannot afford to either rent or buy. With credit markets as tight as they are, and with the restructuring of rules to require PMI on loans > 80% LTV indefinitely, even those who have well-paying, stable jobs are forced to stay at home and save up for a down payment if they ever want to buy in to the market at an affordable rate.

So while the deadlines of 18 – 34 year olds living at home has dominated the headlines in recent years, it’s irresponsible to ignore some of the bigger picture implications of our monetary and housing finance policies adopted in recent years. Stop calling Millennials irresponsible and lazy, and recognize they’ve been forced into a system that they had no hand in creating, and for which they’ve had no ability to circumvent.

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