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The Buyers You Can’t See Yet: Why Today’s Slower Housing Market May Be Hiding Tomorrow’s Demand
What millions of young adults living at home could mean for Littleton, Highlands Ranch, Englewood and the South Denver Metro housing market
If you’ve been watching the South Denver Metro housing market this year, you’ve probably noticed something.
Homes are taking longer to sell than they did during the frenzy years.
Buyers are more selective.
Price reductions are more common.
Seller concessions are back in the conversation.
And it can be tempting to reach a simple conclusion:
There just aren’t enough buyers.
But I think that explanation may be incomplete.
There may be fewer buyers who can act today.
That does not necessarily mean there are fewer people who want to buy.
And a fascinating piece of housing research helps explain the difference.
25.2 Million Young Adults Are Still Living With Their Parents
According to the research, 25.2 million Americans under age 35 currently live with their parents.
That’s more people than at any point on record.
Roughly one in three adults ages 18–34 is living with a parent.
But here’s the part that caught my attention:
Among 25–29-year-olds living at home, 71.1% are employed.
Among 30–34-year-olds, 68.4% are employed.
In other words, roughly seven out of ten adults ages 25–34 who live with parents are working.
That changes the story.
This isn’t simply a group of people waiting to enter the workforce.
A large number are already working.
They just haven’t formed independent households.
And that matters enormously for housing.
The Difference Between No Demand and Delayed Demand
Traditional housing statistics are good at measuring activity.
A house sells.
A mortgage closes.
A lease is signed.
Someone moves.
Those transactions appear in the data.
But what about the 29-year-old professional who has a good job, has been living with parents for three years, would prefer a place of their own and has been saving money while waiting for housing costs to become manageable?
That person doesn’t show up in current home-sales statistics.
They are not current transaction demand.
They are potential demand.
The research makes this distinction directly: someone living with parents can effectively disappear from transaction statistics even though they may want independent housing and may be financially preparing for it.
Multiply that situation across millions of people and the housing market starts to look different.
Perhaps demand hasn’t disappeared.
Perhaps some of it is sitting just outside the market waiting for the numbers to work.
Why Aren’t They Buying?
The answer is not difficult to understand.
Housing got expensive.
The research puts the national median home listing price at roughly $430,000, approximately 34.4% higher than in 2019.
Median asking rent was approximately $1,673, about 17.9% higher than 2019.
For someone trying to buy, the purchase price is only the beginning.
There’s also:
- Mortgage rates
- Down payment
- Closing costs
- Property taxes
- Insurance
- HOA costs in some communities
- Maintenance and repairs
A working young adult can have a perfectly respectable income and still decide that today’s housing costs don’t make financial sense.
And if the alternative is a bedroom at home that costs relatively little, living with parents can be a rational financial decision.
That doesn’t mean they never want to leave.
It may simply mean they’re waiting.
Bruce’s Perspective: This May Help Explain the Market We’re Seeing
This is where the national story gets interesting for Littleton, Highlands Ranch and Englewood.
In the South Denver Metro market research I’ve been doing, we’re seeing buyers take their time.
They’re comparing homes.
They’re watching price reductions.
They’re negotiating concessions.
They’re more payment-conscious.
That can make a listing feel like there isn’t enough demand.
But perhaps the better description is:
There isn’t enough affordable demand at today’s price-and-payment combination.
That is not the same thing.
A buyer can want the home and still decide the payment doesn’t work.
A young professional can want to move out and still choose to save for another year.
A couple can want their first house and still wait for either prices, rates or their own finances to improve.
Demand can exist without turning into a transaction.
That’s an important distinction for both buyers and sellers.
What Happens If Affordability Improves?
This is the part I think homeowners should pay close attention to.
If mortgage rates decline materially, or if prices become more manageable, or if buyers accumulate larger down payments, some of those delayed households may begin entering the market.
And they may not enter one at a time.
The source makes the same point: lower rates could improve purchasing power, but they could also bring more buyers into the market at once. More entry-level housing could improve supply, while still facing demand from millions of households that have been delayed.
That means today’s slower transaction volume should not automatically be interpreted as permanent weak demand.
Entry-level demand may be constrained.
Not gone.
This Could Matter to Sellers More Than They Think
Imagine you own a home in Littleton, Highlands Ranch or Englewood that would appeal to a younger buyer.
Today, that buyer may be hesitant because of the monthly payment.
But if affordability improves?
Suddenly the buyer pool can expand.
More buyers mean more competition.
More competition can affect market time, concessions and negotiating leverage.
That does not mean sellers should wait indefinitely hoping rates fall.
No one knows exactly when affordability will change or by how much.
It does mean sellers should understand that today’s slower market may not necessarily reflect a long-term absence of demand.
Sometimes the buyers are there.
The economics just haven’t unlocked them yet.
Parents Are Part of This Story Too
There’s another side to this trend that I think is especially relevant in South Denver Metro.
When adult children stay home longer, their parents may change their housing decisions too.
The research points out that some parents may postpone downsizing, keep extra bedrooms longer, convert basements, seek multigenerational homes or eventually help their adult children buy independently.
That creates a second layer of delayed housing activity.
Think about it.
A couple in Highlands Ranch might otherwise have downsized.
But their 28-year-old is still living at home.
So they wait.
That means their existing home doesn’t come onto the market.
Their next purchase doesn’t happen.
And the adult child doesn’t create a new household.
One delayed household can influence multiple housing transactions.
That’s something traditional sales statistics won’t easily show.
Multigenerational Living Isn’t Necessarily a Problem
There’s an important point here.
Living with family is not automatically a sign that something is wrong.
Many families genuinely prefer multigenerational living.
It can provide:
- Shared expenses
- Child care
- Elder care
- Stronger family connection
- Greater ability to save
- More efficient use of housing
The issue is not whether someone “should” move out by a particular age.
The real issue is choice.
If someone chooses to live with family because it works well, that’s one thing.
If someone wants independent housing but cannot make the numbers work, that tells us something about affordability.
The source is careful about this distinction, and we should be too.
Household Formation Is the Number Most People Never Talk About
Everyone watches home sales.
Far fewer people watch household formation.
But household formation is one of the engines underneath housing demand.
When one household becomes two, another place to live is needed.
A young adult moves out.
Roommates split up.
A couple separates.
Someone relocates for work.
A family member leaves a multigenerational household.
Each event creates another housing need.
When household formation slows, home sales can slow even if population continues growing.
And when delayed households finally form, demand can accelerate without the population suddenly changing.
That is why this 25.2 million number matters.
It suggests there may be housing demand the market simply hasn’t absorbed yet.
The South Denver Metro Question
For Littleton, Highlands Ranch and Englewood, I think we should start asking a different question.
Not:
“Where did all the buyers go?”
Instead:
“How many potential buyers are waiting for the economics to improve?”
That’s a much more useful question.
And over the next year, I’ll be watching several indicators closely:
- Mortgage rates
- Entry-level inventory
- Seller concessions
- Price reductions
- Rental trends
- First-time buyer activity
- Household formation
- Demand for homes with flexible or multigenerational living space
Those indicators may tell us more about future demand than today’s transaction count alone.
What This Means for Buyers
If you’re living with family and waiting to buy, don’t assume that means you’re “not ready.”
You may actually be doing something financially smart.
Saving.
Reducing debt.
Building reserves.
Improving credit.
Waiting for the right market opportunity.
The important thing is to understand where you stand financially so you can recognize the opportunity when it appears.
Because if affordability improves, you may not be the only buyer who has been waiting.
What This Means for Sellers
If your home isn’t selling as quickly as homes did a few years ago, it does not automatically mean demand has vanished.
Today’s buyers are more payment-sensitive.
They need the price, condition and financing to make sense.
That makes preparation, pricing and negotiating strategy more important.
But it also means sellers should be careful about assuming today’s slower pace represents the future permanently.
There may be more demand waiting outside the market than current sales statistics show.
Bruce’s Bottom Line
Here is the part of this research I think matters most:
Housing demand can be delayed without disappearing.
Twenty-five million young adults living with parents are not 25 million guaranteed future buyers.
The research makes that clear, and we should not overstate it. Some will rent. Some will stay with family. Some will choose other paths.
But millions of working adults have not formed the independent households previous generations often formed at the same age.
Some of them are saving.
Some are waiting.
Some are closer to buying than they appear.
And if housing affordability improves, that delayed demand could become visible surprisingly quickly.
That may be one of the most important housing stories to watch over the next several years.
Because the buyers who are missing from today’s sales statistics may not be gone.
They may simply be waiting for the door to open.
Bruce McQuiston
Your Personal Real Estate Coach
South Denver Metro
Data Before Opinion. Understand the Market Before You Make the Move.
