Fewer Rings, Fewer Deeds
Demographic and cultural changes happen periodically, and it is never clear whether the “good old days” were really that great. However, the following graphic depicts a shift that is truly striking:
It shows the percentage of 30-year-olds who are both married and homeowners. That figure dropped from 52% in 1960 to just 12% today! Here are a couple of underlying statistics to help clarify this seismic change. Around 33% of 30-year-olds own a home today as compared to 47% in 1984, and 51% of 30-year-olds have been married at least once, down from 90% in 1962.
What is going on here? As I have documented in posts on this blog, there is clearly a housing affordability crisis. The annual household income required to purchase the average home is about $120,000 while median household income is roughly $84,000. Second, many young adults are burdened by student debt which has grown from about $1.2 trillion in 2015 to $1.8 trillion today. In addition to financial challenges, fewer people are marrying due to cultural shifts such as increasing economic independence for women, greater emphasis on personal fulfillment, rising secularism, and greater acceptance of cohabitation and alternative family structures. Marriage rates have experienced greater declines among lower-and-middle income cohorts and among racial minorities, particularly Black Americans.
I will leave it to greater minds to determine the potential impacts of this trend, but here are a few to stimulate your thinking:
- Home ownership has traditionally been the primary means for families to build net worth. Lower home ownership may well dampen the financial prospects of many young people.
- As is the case with most industrialized countries, the U.S. has experienced a meaningful decline in the birth rate. Will the lower rate of marriage exacerbate that trend? Lower population growth shifts the burden of economic growth to increases in productivity which may occur but are certainly not guaranteed.
- Certain industries such as furniture, appliances, and garden equipment may suffer. The same may hold true for businesses related to weddings such as venues, flowers, photographers, etc.
- Last, the decline in the number of nuclear families may well have significant societal implications although identifying them is way beyond my pay grade.