According to a recent Wall Street Journal article, layoffs across the nation mean that many teens and young adults are receiving less of a helping hand from Mom and Dad at time when they need it most.
According the Bureau of Labor Statistics, the unemployment rate for workers ages 16 to 29 was 15.2 percent in March, the highest rate since 1948. In March 2010, there were a total of 2.3 million unemployed college graduates, 1.45 million more than in March 2007.
While some think a drop in parental aid and increased unemployment could make young adults more financially resilient, economists worry that without support from mom and dad, this age group may put off entering the housing market, settling into career paths and having families.
“Now, not only do parents no longer have the money to help their children out, but banks will no longer lend to home buyers without the income to support repayment,” says Cheryl Russell, a demographer and author of Americans and Their Homes: Demographics of Homeownership.
The rate of homeownership among people ages 25 to 29 fell to 37.7 percent last year, from a peak of 42 percent in 2006, according to the U.S. Census. Homeownership for those under 25 fell to 23.3 percent from 26 percent in 2005, the lowest rate for any age group.
According to a survey from FindLaw.com, nearly 22 percent of people between the ages of 18 and 34 said they’ve been turned down for a mortgage, loan or credit card in the past year. As a result, many young people are now moving home to save on rent. A recent study from the Pew Research Center found that about 21 percent of young adults say they’ve either moved in with a friend or relative, or had a friend or relative move in with them because of the economy.