REAL ESTATE NEWS

Despite all the stories about unhappy families and children who cannot wait to fly the coop, it seems there are still many families where the nest never empties. Instead, adult offspring still cling to the parental home, sometimes well into their thirties, often due to the force of circumstance and the high cost of housing.

A new study by Apartment List found that 17% of adults aged 25-35 lived in their parents' house – compared to just 7% in 1970. And they are doing so out of necessity, rather than choice, as rents and the cost of housing soar out of reach.

"The prevalence of young adults living with parents is increasing in all parts of the country, and for both those with and without college degrees," the study revealed.

It found that while the current rate compares to the years following the Great Depression, the postwar economic boom enabled young adults to become more independent with just 8% staying home. After 1980, however, the trendline began to rise once more.

"Living with parents has become increasingly common over the course of the past half-century," Apartment List wrote. "Each generation has become more likely to live at home longer compared to the generation that preceded it."

The group most likely to live longer with their parents is millennials. At age 25, 27% lived with their parents, and 9% were still doing so at age 35. Evidence suggests Gen Z is likely to follow the same path, as 30% of 25-year-old Gen Zs still live at home.

"Among young adults who live at home, the share who could comfortably afford to live independently has fallen dramatically," the study found. For this group, the median rent for a studio or one-bedroom apartment would exceed 30% of their income. In 2022, those living at home earned a median of $32,000 – 10% less than in 2000 when adjusted for inflation. In comparison to previous generations, living at home was a matter of necessity, not preference.

Young adults without college degrees are especially likely not to move out. One in five still live in their parental home. Some 71% of all 25-35-year-olds doing so are non-college educated.

But those who do have college degrees are not exempt, and the share of those who still live at home has steadily risen. Even though they only make up one-third of young adults living at home, this share is higher than it has ever been. "In 2022, 12 percent of 25 to 35-year-olds with a four-year degree or higher lived with their parents, up from 6 percent in 1980," the study noted, concluding that high student debt could be another factor.

These trends are found in virtually every part of the country, though the degree varies. "Every single one of the nation's 50 largest metros has seen the share of young adults who live with their parents increase between 2000 and 2022," the study found. The situation was worst in Riverside, CA, followed by Los Angeles, "highlighting the stark worsening of housing affordability in Southern California," it further noted. Miami and New York City metros ranked third and fourth.

However, the study concluded that lack of economic opportunity was another factor, citing more affordable markets like New Orleans, Detroit and Chicago where the live-at-home trend is also high. In contrast, fewer young people are living at home in some markets with booming economies even though living costs are high. In these cases, high-paying job opportunities have offset rising housing costs.

"This trend speaks to the way in which today's economic realities are forcing many of America's younger generations to delay major milestones on the path to adulthood," the study concluded.

Source: GlobeSt/ALM