“Young-adult employment is less than halfway back to normal: Before the bubble, their employment-population ratio hovered in the 78-80 percent range,” Jed Kolko, chief economist at Trulia, said in the article. “Having a job matters for housing. Just 12 percent of employed 25-to-34-year-olds live with their parents, versus 20 percent of 25-to-34-year-olds without jobs.”
According a a recent survey conducted by Fannie Mae, the majority of young adults living with their parents will likely rent rather than buy when they do move out.
Consequently, investors may consider a residential real estate investment trust ETF to capture the greater rent growth. For example, the iShares Residential Real Estate Capped ETF (NYSEArca: REZ) includes a 43.9% weight toward residential REITs, along with 54.1% allocation toward specialty REITs, which include companies that provide storage space. [Residential REITs ETF Stands Out In Financial Sector]
For more information on the housing market, visit our homebuilders category.
Max Chen contributed to this article.