According to recent surveys, millennials are choosing to live at home with their parents in record numbers. In fact, Pew Research Center reports that 15 percent of those between the ages of 25 and 35 were living with their parents in 2016. These figures are much larger than both Generation X (those born between 1965 and 1979) and the Silent Generation (those born between 1925 and 1945), with 10 percent and 8 percent of these generations living at home when they were the same age.
Making the Decision to Move Back Home
For many millennials, the decision to move back home is a reflection of the hurdles they face while trying to get ahead. Among these are rapidly rising urban housing costs and a staggering amount of loan debt. In fact, education debt has doubled since 2009, which a New York Fed study found has resulted in a 35 percent drop in millennial homeownership. For these reasons, living at home with the parents has now become the most common living situation for adults age 18 to 34. This is an important trend to consider when examining the real estate and housing markets, as many researchers believe it is a trend that is likely to stick around for awhile.
Making a Wise Choice
While millennials were once branded with negative descriptors, including being called lazy and entitled, the decision to live at home with their parents is increasingly being viewed as a smart and strategic choice. Affordable housing and starter homes remain difficult to find, with inventory plunging 40 percent since 2012. Moving back home allows millennials to save the money they need while reducing their debt before purchasing a home.
In areas where real estate is particularly expensive with low inventories, the number of millennials living at home is even greater. In Canada, which is facing many of the same issues as the United States, the city of Toronto sees 1 in 3 young adults living at home. A report from a Canadian group called Generation Squeeze has found that while it took young people five years in 1976 to save the standard 20 percent required for a down payment on a home, it now takes 15 years in Toronto and 23 in Vancouver.
When facing these statistics, millennials are increasingly seeing the decision to move back home as more of a “step sideways” than a step back. While it may not be how they envisioned living in their late 20s and 30s, it is the reality of today’s economic landscape. In addition, with many of their peers also living at home, there is less stigma for a 25-year-old to live at home.
For parents of millennials, this housing arrangement can offer some benefits, as well. In fact, many are finding that the arrangement offers back-and-forth support in terms of completing housework, running errands and otherwise sharing the tasks of the home. This is particularly true for older parents, with the National Alliance of Caregiving and the AARP reporting that millennials now comprise one quarter of the 44 million caregivers in the United States.