Whether it's lagging salaries or soaring costs, young adults across the region aren't ready to leave home.
Starting salaries lagging behind inflation coupled with ballooning student debts prevent many recent graduates from affording mortgage and even rental payments, said Bob Reby, CEO of Danbury-based Reby Advisors. As a result, young adults' decisions to defer moving away from home is more a matter of necessity than choice. This is a "systemic societal problem," he said.
"What I'm seeing is young people, as talented as they are, having salaries that are not keeping up with the ability to buy a home at the age their parents or grandparents were when they bought their first home," Reby said. "Inflation adjusted, it's a fraction of what people earned in the 1980s out of school. Even renting is a challenge. If renting is a challenge, buying a house is definitely a challenge. Then, if there's college debt, that's something else they have to deal with."
Reby advises clients to spend no more than 28 to 32 percent of their gross income on housing, whether it's renting or buying a home. But he often sees people making financial decisions based on expected salaries in the future, rather than the present, he said.