More Young Adults Are Living With Their Parents—and It Could Be Hurting the Economy

In the past, life for a young adult might have followed a familiar trajectory to that of one’s parents: go to college (or don’t), move out, get a job, marry, and purchase a home.

However, some young Americans haven’t moved out of mom and dad’s house just yet.

In 2005, 11% of 25 to 34 year olds reported living with parents, but by 2023, 16% were, according to Census research.

So what’s keeping more young adults at home?

Researchers speculate that this cohort could be opting to live at home for financial reasons.

The cost of both renting and homeownership have increased dramatically over the past few years, and younger generations are more likely to have student loan debt than older ones.

This issue could worsen in the near future, too, as some recent college graduates have struggled to find jobs. For college graduates aged 22 to 27, the unemployment rate is 4.8% compared to 4% for all workers, according to data from the Federal Reserve Bank of New York.

And more young people living at home could have negative downstream effects for the economy more broadly.

When young adults live at home, they may spend less compared with to their peers who moved out. Since consumer spending is a large share of GDP, an increasing proportion of young adults living at home could be a drag on GDP growth.

“The rising share of young adults living at home may, therefore, have depressed overall consumer spending by $12 to $13 billion, or about 0.1% of total consumption,” states a report from Oxford Economics. “A worse perception of labor market conditions, which for young adults are the key determinants of financial well-being, is making them more pessimistic and may make them more cautious when it comes to spending.”