The evolving nature of homeownership in the modern world: A more-complex and expensive existence and the proliferation of boomerang children

Real estate and home buying has changed a lot over the last few decades, but these changes may pale in comparison with the changes that resulted from the Industrial Revolution

The American Dream: Owning your own home

​Buying a house is a critical step in most adults' lives in the western capitalist world. Still, we've seen a lot of changes related to homeownership and when homeownership happens over the last century. The way things are now from a home-buying perspective is not how they've always been. In fact, the way things are today is very different than they've ever been in human history. 

Family life and real estate have changed after the Industrial Revolution

​Before the Industrial Revolution, the world was very different than it is no. People lived in small communities, traveled very little, and interacted with less than a few hundred people over the course of their entire lives. A man leaving his home go out on his own would rarely have seemed like a prudent decision - how would he and his family survive without kin? A woman leaving her home alone to go out and make something of herself in the world? This was a non-starter in a non-capitalist and agricultural world when kinship and ancient communal ties kept you safe, fed, and busy. 

In the 21st century, real estate traditions and family life evolved further: The rise of the boomerang child

Over the last century, as the western world (especially the US) modernized, it became typical for young men and women to leave their parents' home when they turned 18 - this usually coincided with the start of a college education. Not everyone had the opportunity or the desire to leave home in this way, but many did, and this phenomenon increased over time. 

In the early 21st century, further shifts and refinements to this novel paradigm occurred. A combination of factors, including the following

• housing becoming more expensive
• school-age children being increasingly protected and coddled in modern civilization
• automation removing the need for a lot of unskilled labor
• global macroeconomic shifts that took a lot of menial and unskilled labor (the kind of things young people would typically start out doing) oversees
• less governmental influence on the US's capitalist system, allowing for less income to flow to lower-skilled and lower-wage workers
• increased competition in the labor force causing a need for more education to be able to compete effectively (e.g., the phenomenon that you can't really expect to be in the middle class with just a high school education any longer; the fact that the person who makes your coffee might have a bachelors degree)

has caused some significant shifts to most western economies, including the US. Today, it's not so easy leaving your home at 18 and never coming back. Today, a bit of a different approach seems to have become the norm. 

In today's world, students leave at 18 for college, but typically either return home or need some extra support from their families even after they graduate. The idea of being able to leave home at 18 and have an economy that is able to provide enough income for you to do that in a separate housing unit is a bit wild - only economies that are growing substantially can support that sort of lifestyle. A more reasonable lifestyle is staying within the parental unit, at least in part, until you develop enough skills, income, and savings to be able to go out on your own and be a productive part of the global economy. 

A lot of people, however, never develop the needed skills or the required savings and income to go out on their own. This is something that has been increasing. You can now easily find people in their late 20s living at home and even people well into their 30s. In 1950, if a 35-year-old man was living at home without a family of his own (and he came from a typical middle-class family), it would be a pretty big negative for him.

Maybe boomerang children aren't so bad? Towards a healthier perspective on modern real estate and modern family life.

Many people talk about the second shift (the one from leaving at 18 for good to the more complex current situation), but not a lot of people talk about the first. You won't see articles in the financial news and financial media talking about how interesting it is that society has changed so much. Still, you'll read about boomerang children and college-education coffee makers all the time on popular financial websites. 

We've got to do a better job of putting things into perspective and understand that just because things were a certain way for a bit of time (maybe a few decades), doesn't mean that's how they've always been or how they should be. Perhaps it makes more sense for families to be tighter knit from a financial perspective. Maybe it doesn't. Either way, assuming something without taking a broader perspective is both narrow-minded and will prevent you from making some interesting and potentially useful insights. 

Some of these insights might include the following:

• the acceptance that your children will very likely need more support from you past age 18, which will have a very significant impact on your financial planning
• a more appropriate reaction to seeing a 27-year-old living at home and saving up for a house
• better city planning that takes into account the fact that more generations live under a single roof today than they did when many of our cities were designed and built
• better inter-family risk management practices, such as pooling funds for healthcare or other emergencies