Young Adults Living with Parents: An Economic Trend

Approximately one in three Americans aged 18 to 34 live with their parents, a trend rooted in economic challenges and shifting societal norms. The phenomenon escalated significantly in the decade following 2005, remained stable until the pandemic caused a temporary uptick in co-residence rates. Young adults report feeling economically constrained, with nearly 30% of Gen Z expressing a desire to save but citing inadequate income. Victoria Franklin, a 27-year-old from New Jersey, exemplifies this trend; she moved back home after graduation to save on living expenses while seeking job opportunities. The inability to save for significant life milestones, fueled by high housing costs and stagnant wages, compels many young adults to remain or return to parental homes. Current household debt levels, particularly among Gen Z and millennials, exacerbate financial burdens, with many struggling to accumulate emergency savings or afford quality housing. The economic landscape that supports homeownership has shifted significantly since previous generations, making it challenging for young adults to reach their financial goals. The call for using various housing policies to create affordability options is critical, as they can stimulate economic activity by enabling more young adults to move out and spend on essential life investments. This delay in household formation also leads to broader economic repercussions, given the essential role of consumer spending in a thriving economy.