Why Do Half of Young Adults Live with Their Parents?

Katie: A headline began circulating in 2021 that had adults in a tizzy: “Half of young adults live with their parents.” Could this be true? And if it is, why? Today, we are digging in. Welcome back to The Money with Katie Show, Rich Girls and Boys. I am your host, Katie Gatti Tassin. 

In the post-pandemic zeitgeist, a meme has been circulating on social media that claims 52% of young adults live with their parents. Though, to be fair, the meme does not define “young adults.” As outrageous claims swirling in the internet cesspool often do, it generated outrage for polar opposite reasons. Depending on your worldview, you probably jumped to one of two conclusions about this claim. Number one: that the cupcake trophy generation clearly can't hack it without Mommy and Daddy. And if they'd just stop getting degrees in underwater basket weaving and YOLOing it up in Europe, they could hurry up and be miserable like the rest of us and make it on their own. Or number two: that the system is so broken to the point that the most educated, most in-debt generation of all time can't make ends meet, and things are effed beyond repair and we need to blow the whole thing up and start over.

Or maybe you had a third reaction: incredulity. Could this really be true? These numbers seem way too high. Some responses pointed out that the numbers could be skewed for several reasons, including people whose parents live with them, as in the child is the caretaker. Others noted that young adults could include college students who would be making a fiscally wise choice by living at home, rather than shelling out thousands of dollars per month for on-campus housing. Still others went back a step and they asked, why have we decided that this is a bad thing? Shipping out of the nest at age 18 or else you're a failure is not a global expectation. Multigenerational living is normal and culturally prevalent outside the US. Two members of our team are South Asian and Hispanic, respectively. And when we were discussing this topic, they both pointed out how multigenerational living situations are actually more common than not in their cultures. But before we spiral into cultural norms and generational spite, let's ask ourselves an important question: Is this claim legitimate? We'll be right back after a message from the sponsors of today's episode. 

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Katie: So where does the data come from? The first stop on my investigative journey was to check the Pew Research Center, since they have the historical context. In data titled “Share of young adults living with parents rises to levels not seen since the Great Depression era” (we will link that zinger in the show notes), a dot graph spans the 120 years from 1900 to 2020, and it shows the percentage of 18- to 29-year-olds in the US living with a parent. And the trend line is interesting, because between 1900 and 1930, the number hovers in the low forties range and spikes at 48% in 1940, so during World War II. Then a steep drop-off is observed in the 1950s, when the number plummets to 35%, and then it stays relatively low, hitting 29% in the 1960s, 31% in the 1970s, 32% in 1980s, and then begins climbing again in the 1990s, breaching 40% again for the first time in the 2010s, and remaining in the high forties in the 2020s.

The graph’s footnotes are careful to note that the way this data is captured has changed over time. It does appear that there were three different means of collection over the 120 years shown. And as with all conclusions that hinge on data, our hot takes can only be as valid and sound as the data itself. Maybe most importantly, we now have a more substantive specific definition of “young adult”: someone aged 18 to 29 years old. 

So the 52% peak of adult children living at home was in July 2020 during…well, you know. So per Pew, among all adults who moved due to the pandemic, 23% said the most important reason was because their college campus had closed, and 18% said it was due to job loss or other financial reasons. And for the commenter who was curious about how parents who actually live with their children played into things, Pew does note, and I quote, “The vast majority of young adults who live with their parents, 88%, live in their parents' home. And this group accounts for the growth in the population of adult children living with their parents. Nearly all of the remainder live in their own homes along with their parents, or in homes headed by other family members. And these shares have been relatively stable for the past decade.” End quote. So translation: The growth in adult children and parents living in the same home is being driven largely by young adults moving back into their parents' homes.

But all young adults are not created equal, right? Because here's the kicker: Most of that growth was generated by the youngest of young adults. Because context is key here, no? 2.1 million of the 2.6 million increase in 18- to 29-year-olds was driven by 18- to 24-year-olds, the same cohort that's more likely to be found still in school. I don't know about you, but Katie at 21 and Katie at 28 are in such different positions so as to be almost completely different people. Although both are five foot one of pure sass and fury, baby.

Anyway. When you segment the 18- to 29-year-old group into 18- to 24-year-olds and 25- to 29-year-olds, the picture looks completely different. The increase for the older crew increased from 26% in February 2020 to 28% in July 2020, which is a far cry from the “52% of young adults” blanket claim. Age differentiation here feels important, since the outraged crowd in the meme comments seem to picture Brennan and Dale building their adult bunk beds when they're claiming that young adults have no desire to be independent anymore. And of course there was a bit of a unique situation that spurred this increase: global panini with a side of waffle fries, anyone?

But that did not stop plenty of outlets from running with the panicked headline “Half of Americans aged 18 to 29 live with their parents!” And several of the articles, like this one from Yahoo Finance and this one from Fortune, which we’ll link in the show notes, assign a pretty damning narrative to the data: that young adults are living at home so they can buy Chanel bags and flex on their friends, which…the relationship between the two data points is tenuous at best. They basically try to posit this logic that young people are living at home at record rates and luxury goods sales are rising among young people. Ergo, young people are living at home because/so they can buy luxury goods? Which is weird, considering later in the same Yahoo Finance article, it states that 51% of young adults say they're living at home so they can save money and 39% of them say it's because they can't afford rent.

Regardless, things seem to be normalizing, but I would ask, what if normal might still be bad? A USA Today fact check from late 2021 noted that the number had begun dropping again, back to around 47%, which is more in line with pre-pandemic numbers. Though I can't find any updated figures for late 2022–early 2023, unfortunately. But let's revisit that original chart, that original data source, because 47% is still historically pretty dang high compared to the last 70 years. And as people in the comments called out, it's not that multigenerational living is on its face a bad thing. But young adults living at home 'cause they literally can't afford not to is an interesting barometer of how dire our economic situation is. 

In a culture where living with your parents as an adult is not the norm, it stands to reason this is not the default first choice for people in their twenties. It's hard not to notice that the spikes of adult children living at home coincide with some of the diciest economic times: the Great Depression, the Great Recession, Covid-19. The anti-Reaganomics advocate in me badly wants to point out, so I will, that rates were lowest after the FDR New Deal era—America in the fifties, sixties, seventies, and eighties—and then began climbing in the 1990s and basically never stopped. We'll be right back after a message from the sponsors of today's episode. 

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Katie: So no, kids these days don't prefer being gig workers without health insurance who live with their parents. And when we use “adult children living at home with their parents” as a proxy for “hmm, how badly is shit going?” we can examine what types of policy decisions in the past were good for this important but often financially vulnerable demographic: people who have very little money, but a lot of potential in the labor market, and who are usually interested in starting families and buying homes. While this isn't a perfect one-to-one correlation, it is something. Importantly, using this proxy distinctly does not blame individual behavior or slippery cultural phenomena for massive demographic-wide shifts.

One article suggested social media made young people prioritize luxury goods over living independently, and every 30-year-old collectively rolled their eyes. 'Cause when findings like these come out, we have a tendency to attribute them to factors like personal preference. “Yeah, young people these days are just so different than young people of the past. They don't wanna be independent, they don't wanna work, they don't wanna have a house of their own.” But what we often chalk up to niche, ill-defined cultural shifts is usually just the result of a much more boring, much sadder story: a worsening economic reality. I won't saddle up my soapbox with data around everything from the cost of higher ed to the way median home values are far outpacing median wages to the childcare affordability crisis to the skyrocketing host of healthcare costs. Really, I won't, because I've done it before, and we will link that in the show notes, too. But there is one thing I know for sure: that 47% of young adults aged 18 to 29 may live with their parents, but trust me: It is complicated. 

All right, y'all, that is all for this week. I will see you next week, same time, same place, on The Money with Katie Show. Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin, with our audio engineering and sound design from Nick Torres. Devin Emery is our chief content officer, and additional fact checking comes from Kate Brandt.