Marriage Rates Down, Cohabitating Rates Up: It's Not Just Student Debt to Blame

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Young adults delay marriage longer than ever. Student debt is a key reason.

A St. Louis Fed study shows As Fewer Young Adults Wed, Married Couples’ Wealth Surpasses Others’.

Since the 1960s, the median age at first marriage has steadily increased for both women and men. The last three decades were no different for young adults: The age at first marriage went from 26.2 for men and 23.8 for women in 1989 to 29.5 and 27.4, respectively, in 2016. As marriage rates decline in young adulthood, more young adults are choosing to cohabitate (reside with an unmarried partner) and are doing so at earlier ages. The increase in unmarried partnered young adult couples is evident. The share of married households dropped steadily from around 57 percent in 1989 to 37 percent by 2016, while partnered households grew from about 7 percent to 21 percent.

Wealth Effect

As the share of married young adult households declines, their median net worth (both total and when omitting housing-related assets and debts) has remained consistently higher than that of single households. From 1989 to 2016, the typical married household had around three times as much wealth as a partnered or single household.

Student Loan Debt Is Widespread across Young Households’ Balance Sheets

The shifting share of married versus unmarried young adult households is also associated with changes in the composition of debt. This shift is most pronounced when examining the rise of student loan debt. Recent research suggests that growth in student debt levels is associated with marriage delays or avoidance. This suggests that young adults increasingly feel that their debt is an economic barrier to transitioning to adulthood and forming a family.

In 2013, the share of young adult households with student loan debt, 42.1 percent, surpassed the credit card debt rate, 40.1 percent, for the first time. By 2016, 46 percent of young adult households had student loan debt, triple the 1989 percentage.

Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes

NPR reports Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes

Homeownership rates for people ages 24 to 32 dropped nearly 9 percentage points between 2005 and 2014 — effectively driving down homeownership rates overall. In January, the Fed estimated 20 percent of that decline is attributable to student loan debt.

"It's not that they're not going to buy homes. It's just that they'll purchase these homes later in life," says Odeta Kushi, deputy chief economist at real estate research firm First American.

Baby boomers were 25, on average, when they purchased their first homes; millennials, by comparison, are waiting almost a decade longer, Kushi says.

"Approximately 40 percent of those who start college do not finish within six years. ... That's a huge number," says Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute.

For those people, it is the worst of all worlds — they have the school debt without the higher wages to show for it.

Attitudes, Attitudes, Attitudes

Homeownership rates may rise, but not to the same rate as boomers. Student debt is only one pf the reasons. Attitudes about marriage, having kids, mobility, and debt have all changed.

This is not 1960 or 1971.

To top it off, houses simply are not affordable. That's what the cohabitation rate shows. Wages have not kept up with home prices even without the burden of student debt.

Mike "Mish" Shedlock

Comments (19)
No. 1-13
2banana
2banana

The trend towards not getting married in perfectly understandable from a men's point of view.

Divorce courts and divorce laws are stacked against the man. it is near financial suicide to get married for the man if something goes wrong.

Additionally, you actually pay more in taxes if you are married (with both spouses making near the same salaries).

offintherough
offintherough

Aligned with the fact that a majority of millenials have seen their parents or friend's parents not make it through 25 years of marriage and to have to start over there is another reason. Young women's potential for financial self-support by now graduating college at higher rates than men and being more opinionated than ever (Think Men are from Mars and Women are from Venus) don't support long term relationship development. Cohabitation makes sense when the pressure of modern society doesn't have one person or the other dependent financially on the other and allows for more frequent breakups. This more tenuous beginning to a relationship, fragile bond and ability to call it quits quickly along with religion becoming a smaller piece of every generations' life, will push marriage rates down further.

shamrock
shamrock

The marriage tax penalty just keeps getting more and more pronounced. The new tax law has a maximum SALT deduction of $10,000 whether you are single or married. That's a $2,500+ tax penalty right there.

wootendw
wootendw

Speaking for myself, the marriage penalty returned when I retired (at 59) but my wife continued to work in a high-paying job (pharmacist). Whenever I took money out of my IRAs, the tax rate was the same as my wife's.

Moreover, our house was paid off so not enough itemized deductions to exceed the standard. Now, that we're divorced, the rate has diminished.

Now I have to convince my daughter to let us pay for her fifth year in college which she will need to take the CPA test. An BS accounting degree by itself isn't worth much and you need 5 years to be eligible to take the CPA. So she has applied for her Masters - and needs $30k for it. She doesn't want to take money from us; wants to take out a student loan which will mean $350/mo for 10 years (at least).

Stuki
Stuki

Once feudal states get oppressive enough, men simply cannot afford families of their own. After all, if they could, that would mean some money is still left on the table after they have paid what they "owe" the privileged castes in taxes and rents. Instead, men need to offer their daughters up as concubines for their overlords. While working doubly hard to support them in their haremhood. Since, after all, the concubines can reliably be counted on to vote in favor of being supported, rather than not being supported. Duh! And well indoctrinated idiots can, equally reliably, be counted on to fall for the scam that demoooooocraciii is some sort of excuse for any old idiocy their feudal lord gets on teevee to promote.

Ted R
Ted R

If two people really love each other they will find a way to make a marriage work. Most of the comments on this thread sound like they are from community college psych professors who don't live in the real world. Most college professors don''t function in the real world. Most politicians don't either, now that I think about it.

Ted R
Ted R

So many woman today want to live exactly like a man. That certainly doesn't help most relationships much.

MissionAccomplished
MissionAccomplished

Without the nuclear family our civilization is just so much plasma drifting in the wind.

Watch and see.

ReadyKilowatt
ReadyKilowatt

As a single man never married I have no dog in this hunt, aside from the reality that even if I did want to start dating, that pool's not very deep these days.

But about the marriage "penalty." The income tax system is set up for households, not employees. I really don't have any sympathy for you if your dual income household pushes you into a higher tax bracket. If I had two jobs I'd probably be in a higher tax bracket than if I only had one. And Clinton's "correction" gave special privileges to a select group, something we're all supposed to be against, especially when that group is a majority.

And besides, it's all just social engineering with the tax code anyway.

Casual_Observer
Casual_Observer

If you asked many with marriage and children whether they would do it again, I think over half would say no. We are quickly become a developed nation like Europe.

Truth100
Truth100

Hebrews 13:14 1Corinthians 7:2. ..If folk woyld reaf and obey the WORD of God And not Man.Challenges WOULD be solved living RIGHT to the bible.. co habitation is erong im the eyes of THE Lord Jesus. Better to marry than burn in Hell ...fornication ..marry and commitment. Defeat problems together.

KidHorn
KidHorn

I've also noticed young people don't even seem to be dating much. At least from looking at my kids and their friends. Wonder if there's something in the air or water that kills certain urges. Something that older generations weren't exposed to growing up.

mark0f0
mark0f0

Top US citizen STEM grads basically have their job applications thrown in the garbage. Employers are addicted to using foreign national labour instead of hiring locally. Job market stress, high 'unemployment', and the lack of labour mobility are prominent factors affecting millennial confidence.