About 1 in 3 American adults between the ages of 18 and 34 live in their parents' home, according to U.S. Census Bureau data.
The pandemic has caused more young people to return home or stay with their parents in their late 20s and 30s, but aside from this rise, the numbers have remained fairly constant in recent years.
Before the pandemic, the most recent increase in the share of people ages 18 to 34 living with their parents occurred between 2005 and 2015, according to Census Bureau data.
“Those were times[during]the Great Recession and coming out of the Great Recession, and there were a lot of media narratives at the time about millennials eating too much avocado toast to survive on their own,” said Joan Hsu, an R&D expert. An associate professor at the University of Michigan who co-authored a 2015 study on “boomerang” babies for the Federal Reserve.
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“What we found is that part of the reason we're seeing this uptick in young people not leaving or returning to the nest is the idea that it's been harder for them to overcome trauma,” Hsu said.
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“Why rent and give my money to someone else?”
Victoria Franklin, left, has lived with her mother, Terrilyn Franklin, right, in Oceanport, New Jersey, since graduating from college in 2019.
Natalie Rice | CNBC
Victoria Franklin, 27, returned to her mother's house in the summer of 2019 after graduating from college to look for a job in business administration.
“I ended up working as a bartender and waitress until October (of 2019), where I got my first offer,” Franklin said. “So it took a little longer than I expected.”
She found work in her field in New York City, which required a two-hour commute from her mother's home on the Jersey Shore.
“I thought, you know, in six months or so, I'll move to the city and be closer to work,” Franklin said. “The pandemic has thrown a wrench into those plans.”
Franklin has decided to continue living at her mother's house after switching to a fully remote job in the fall of 2023.
“My mentality is why would I rent my money and give it to someone else when I can start owning?” Franklin said.
Franklin said she saves 40% to 50% of her income, with a “large portion” allocated to a down payment on a home.
While living with parents can provide personal financial benefits, experts say this trend could negatively impact the economy.
“We also have the attitude that what is really good for an individual person or household is not necessarily good for the entire overall economy,” Hsu said. “One of the big boosts to consumer spending is when people form households.”
The Federal Reserve estimated in a 2019 research paper that young adults who move out of their parents' homes will spend about $13,000 more annually on things like housing, food, and transportation.
Watch the video above to learn more about why the trend of young people living with their parents persists and what it means for the economy.
