You’re 25, a newly minted adult at the leading edge of a generational cohort of

Source: Pew Research Center

As successive generations of young adults in the United States cope with rising student debt and housing costs, multigenerational living is increasingly providing a respite from the storm. A quarter of U.S. adults ages 25 to 34 resided in a multigenerational family household in 2021, up from 9% in 1971.

Now, mind you, they’re not doubling up and/or living in Mom and Dad’s basement, or delaying forming their own households because they want to. At least in many cases, the reason for their living situation choice checks the box “for financial reasons,” even though most Americans think it’s a “bad thing.”

In July 2022, half of adults ages 18 to 29 were living with one or both of their parents.”

The issue is this. Housing affordability, for what it’s worth, depends on bending not one, but two curves towards one another.

Everyone focuses most on the “cost curve,” and why not? Given that many inefficiencies and wasted resources add layer upon layer of price barriers into the cost of offering a new home, whether it’s to buy or rent, a push to reduce cost is definitely . There are known and still unknown opportunities to subtract those inefficiencies and wastes from the process and bend that cost curve downward by, some estimate, 30% or 40% of the total input expense of a house.

Few, however, focus on the other curve – raising payment power through education, training, apprenticeships, and lifelong learning and reskilling – gets short shrift in most discussions of access to attainable housing.

And as we go forward, the promise of data needs to become the necessity of data.

Lennar executive chairman Stuart Miller told us in 2018 that his vision for the enterprise as a pure-play builder – which it’s still on course to become as it effects its plan for a spin-off – amounts to a simple rule that in the real world means having and understanding data:

Remove every part of the expense in our process that doesn’t offer value to our consumer.”

Before concluding, however, that GenZ should not be your target because their expectations regarding homeownership are so low, think of this line – quoted from Morgan Housel’s Collaborative Fund post.

What’s your secret to living a happy life?” 98-year-old Charlie Munger recently replied:

‘The first rule of a happy life is low expectations. If you have unrealistic expectations you’re going to be miserable your whole life. You want to have reasonable expectations and take life’s results good and bad as they happen with a certain amount of stoicism.'”

What’s likely is that Generation Z – by virtue of the adversity greeting their coming of age in America at a tumultuous time – will cause a good thing to happen in homebuilding, which is that, thanks to data’s role in enterprises like Lennar learning about people, homebuilders will “remove every part of the expense” in all of their processes “that doesn’t offer value.”

That process can kickstart now, while expectations are low.

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