Is the Decline in Young Adult-Led Households a Cyclical Slip or the New Normal?

According to NAHB’s analysis of the American Community Survey (ACS) data, the headship rates among young adults (the share of adults ages 25-34 heading their own households) declined in 2024 to 43.7%. Declining headship rates mean that adults form fewer households and demand fewer housing units.

The recent wide fluctuations in headship rates demonstrate their susceptibility to cyclical factors. This is particularly true for younger adults, who recorded some of the largest fluctuations in headship rates.

Recent Data Trends

Following the housing market collapse of 2008 and the subsequent slow recovery, the headship rate for adults ages 25-34 declined persistently for over a decade. By 2017, the rate hovered just above 40%, as a growing share of young adults lived with parents, in-laws, other relatives, or shared housing with roommates. Reflecting improving housing affordability, headship rates for young adults stabilized in 2018 before the pandemic rocked the housing market, but the gains were modest.

The COVID-19 pandemic released pent-up housing demand, especially among young adults. A heightened preference for space and independence, combined with excess savings accumulated during lockdowns and low mortgage rates, pushed the headship rate for 25- to 34-year-olds to 44.2% in 2023 — the highest level since the 2008 housing crash. However, persistent housing shortages and builders’ limited ability to expand production prevented a full return to the higher headship rates.

Historical Benchmarks

While cyclical factors cause temporary fluctuations, fundamental structural changes — such as delaying marriage and childbearing, rising student debt, and greater acceptance of shared living arrangements — may have lasting effects and permanently lower equilibrium headship rates.

NAHB’s analysis of historical Decennial Censuses and ACS data shows that headship rates have decreased across all adult age groups over the past several decades. Adults ages 25 to 34 experienced some of the largest declines since the 1990s and early 2000s, when nearly 46% of young adults in this age group were household heads.

If these long-term trends represent permanent shifts in lifecycle timing and living preferences, then the headship rates from the 1990s and early 2000s may no longer serve as accurate long-term benchmarks for forecasting or policy. In fact, the long-term average — commonly used as a proxy for normal or equilibrium rates — is now several percentage points below the headship rates of the early 2000s for all age groups.

NAHB AVP of Housing Policy Research Natalia Siniavskaia highlights the geographic differences, and the factors influencing them, in young adult headship rates in this Eye on Housing post.