A new report from the Urban Institute states the share of young adults living with their parents has increased from 12% to 22% between 2000 and 2017. That means roughly 5.6 million people between the ages of 25 and 34 are living with mom and dad. Researchers Jung Hyun Choi, Jun Zhu, and Laurie Goodman examine the causes and consequences of this change and how it could have a long-term impact on homeownership. See an excerpt from the summary below.
This trend matches the decline in young adults’ marital rate (from 55.3 percent to 40.0 percent) during this period. Increases in rents and student debt plays an important role in young adults’ decisions to stay with their parents. Metropolitan statistical areas with higher unemployment rates experienced a greater increase in the share of young adults living under their parents’ roofs.
This early life choice could have long-term consequences. Young adults who stayed with their parents between ages 25 and 34 were less likely to form independent households and become homeowners 10 years later than those who made an earlier departure. Even if they did ultimately buy a home, young adults who stayed with their parents longer did not buy more expensive homes or have lower mortgage debts than did young adults who moved out earlier, suggesting that living with parents does not better position young adults for homeownership, a critical source of future wealth, and may have negative long-term consequences for independent household formation.
Read More
