The share of adults in the age group of 25-34 years who are living with their parents has increased from 11.9 percent in 2000 to 22 percent in 2017. Recent research by the Urban Institute investigated this trend to find that even as the homeownership rate of this age group had stabilized over the past few years, the share of young adults living with their parents continued to rise.
The research, which used the Decennial Census and the American Community Survey (ACS) to explore why young adults chose to live with their parents, also explored the reasoning behind the long-run increase in this trend. it looked at how shifts in individual characteristics affected young adults' decisions to not live independently. It also examined how housing costs played a role in how millennials in different income groups responded to increase in rents and also estimated how much each variable explained the increase of young adults living in their parents' home controlling for other factors.
Indicating that this early life choice could have long-term consequences, the research found that millennials in this group who lived with their parents were less likely to form independent households and were more likely to lag in homeownership by 10 years compared to their peers who left their parents' home earlier. Nor did living with parents help these millennials to be in a better position as homeowners, the research said, as young adults who stayed with their parents longer did not buy more expensive homes or have lower mortgage debts compared with young adults who move out earlier.
Another prominent trend was the correlation between a delayed first marriage and the reluctance of young adults to leave home. The research found that because single adult children were more likely to live with their parents than those who were married, this was the single largest explanatory factor in the increase of children living with their parents. It said that between 1990 and 2017, the share of married young adults (ages 25 and 34) dropped from 59.4 percent to 40.2 percent. Those who never married increased from 29 percent to 53.4 percent.
As a result, the research said, if the marital composition in 2017 had been the same as in 2000 while the share of young adults living with their parents stayed at the 2017 rate, then "17.8 percent of young adults would be living with their parents in 2017." This is lower than the actual rate of 22 percent in 2017 but is still significantly higher than in 2000.
The research also gave an impetus to young adults to move out of their parents' home earlier. It said that those who bought homes between the ages of 25 and 34 had the greatest housing wealth at the age of 60 and those who bought before the age of 25 received the biggest housing investment return.