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The Not-so-empty Nest: Why One in Three Adults Under 35 Live With Their Parents

The news isn’t all bad, it seems. Young adults living at home may have to restrain their behavior a bit, but they’re also showing adult restraint with finances, at least in terms of what they dish out for rent or a mortgage.


Living with your parents isn't all bad; it may give your finances a leg up in the long run.There’s a one in three chance that as you’re reading this — whether by tablet, smartphone, or a sophisticated-looking Mac laptop — a big part of your life remains somewhat unsophisticated and, well, maybe even embarrassing.

Pssst: Your mom just called and your breakfast is getting cold.

1 in 3 adults under 35 live with parents

If the American Dream of buying a home, or at least renting your own pad, stood just within reach for thirtysomethings a generation ago, it’s a far different story today. According to the Trulia Trends blog by chief economist Jed Kolko, more than 31 percent of 18-34 year olds live with parents in 2013. That’s right: 1 in 3. Could be the guy in the cubicle next to you. Or the gal in the cube next to him. Or you: The odds are it’s one of you, if you’re all under 35.

The 31 percent figure marks an increase from 27 percent pre-recession, and depending on how you view it, that’s either a modest jump of 4 percent, or a shocking 15 percent increase. (Both numbers are correct, by the way. It depends on whether you view the increase as additive, or weigh it against the original cohort.) And they’re statically solid, originating from numbers complied in the Current Population Survey and by the federal Bureau of Labor Statistics.

Moving home does save on the rent

So what does all this mean, for the economy and for you? The news isn’t all bad, it seems. Young adults living at home may have to restrain their behavior a bit, but they’re also showing adult restraint with finances, in least in terms of what they dish out for rent or a mortgage. Based on a figure of $500 savings per month on housing, a live-at-home young adult will save $12,000. And provided you don’t blow it all at the bar, or attend every outdoor summer music festival, that represents a 10 percent downpayment on a $120,000 home or condo.

Insofar as the housing market goes, Kolko says the situation is creating a pent-up demand. Adult kids can’t live with Mom and Dad forever, and likely don’t want it to turn into a semi-permanent situation. So when they leave, “there should be a surge in housing demand, especially for rentals, which will give the construction industry and the overall housing market a boost,” Kolko says.

He hastens to add: “But just not yet.”

And can buy time to find the right job

What’s keeping adults 18-34 at home besides cheap housing, easy access to a washer and dryer, and maybe free food to boot? It has much to do with employment. Parse the figures and you’ll find that 44 percent of 18-34 year-olds without jobs live with their parents, versus 25 percent with jobs.

This brings up an interesting wrinkle the stats don’t shed much light on. While a fruitless job hunt can get depressing, the comfort of having a roof over your head, and your parents around, can remove some incentive for finding gainful employment.

I know; When I moved home from Rutgers University, I stayed with Mom and Dad for five years. Mom made dinner almost every night, and she was a fabulous Italian cook. Home-made meatballs. Cheesecake. Pork risotto. Why leave that behind for the joy of ramen noodles and frozen dinners?

But the opposite also applies: If your parents prove annoying — or worse — it could put a burr in your saddle to kick the job search, and the accompanying housing search, into a higher gear.

When I left home after five years, I was still underemployed, broke and largely without prospects. This much I learned: You don’t have to know exactly where you’re going to get going. If the “ready, fire, aim” strategy has any sort of wisdom to it, my scramble to survive and put down stakes proved a great motivator for growing up and (finally) getting my act together. Right around the time I left Casa Carlozo, I landed my first full-time journalism gig. Two years later, I was on a plane from Philly to Chicago, a moving van in hot pursuit. The timing of it all wasn’t coincidental.

That doesn’t mean it’s easy, though. Kolko points out (and I agree) that the job market needs to turn itself around for young adults for things to improve in substantial fashion. And while certain job sectors are leaning heavily towards the under-35 set — it’s much easier for a young, digital-savvy journalist to get a job than an older one — that’s simply not the case across the board.

“While more young adults are working now than a year ago, their employment rate is still much closer to the worst of the recession than to pre-recession levels,” Kolko observes. How bad? As late as mid-2008, “71 percent of adults ages 18-34 were employed. That dropped to a low of 65 percent in mid-2011 and has risen back only to 66.8 percent.” And I shudder to think how many of the young and employed begin the work day saying, “Would you like fries with that?”

If you can’t stomach it, roommates are the next-best thing

If you’re fighting the battle solo, consider whether it’s time to synergize and strategize. Several roommates pooling resources have a much better chance of living on the cheap, as do young married couples who combine incomes and possessions. Also take a look at playing landlord, or at least a junior version: It’s always possible to recruit a bunch of roommates, handle the lease yourself, and sublet to them at a modest markup that allows you to live rent-free, or close to it.

Meanwhile, if you’re bummed about sleeping in the same bedroom where you used to watch “Dora the Explorer” and “Blues Clues,”  remember what’s so often repeated by myself and other bloggers at this site: Nothing beats having goals to shoot for, and plans to make them happen. I’m hardly a fan of Dr. Phil, but he’s written that a big difference between high school students who succeed, and those who get in trouble, is that the successful kids busy themselves chasing after a goal, whether it’s buying a car or getting into a great college.

That distinction, I believe, applies to leaving the nest and striking out on your own. If you’re already there, hats off to you. It’s not easy to run your own household, is it? And to those stlll trying to get there, but struggling with it, drop me a line. I’d love to hear from you, and share whatever good stuff I learned on the way to cutting the apron strings once and for all.

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About Lou Carlozo

Based in Chicago, Lou Carlozo is a personal finance contributor for Reuters Money, a columnist with DealNews.com, and a former managing editor at AOL's WalletPop.com. Contact him with story ideas for Money Under 30 at feedbacker@aol.com, or follow him via LinkedIn and Twitter (@LouCarlozo63).

Comments

  1. Let’s put aside the economy and the recession and use the pre-recession number of 27% of ppl under 35 living with mom and dad. That is still CRAZY. You know why I was able to support myself on my own when I was 18? Because there was no other choice. There was no parents’ basement to move back into. Give these young adults a choice of working two jobs or going hungry and I bet that 31% / 27% number falls real fast.

  2. I just moved out of my parents house after a full year of living at home. It was a tough but beneficial year. No I didn’t get a free ride. I paid rent every month and at the same time saved enough money to pay off a large chunk of my student loans. Now I am out on my own again, with a much lighter load and better savings backing me up.

  3. Laura D says:

    Not all Millennials are living with their parents because they don’t want to or can’t move out. I know that this isn’t the situation for MOST people my age living at home with their parents, but I’m living at home to help my mom with her bills. When she lost her job I moved in with her to help her with the bills and keep her from losing her house. I save some money on rent (if I had an apartment by myself), but I’m still responsible for several hundred dollars toward rent, plus buying groceries and helping with housekeeping. It can be a mutually beneficial arrangement and doesn’t mean that kids aren’t able to support themselves.

  4. In my case I had to move and find my own way at 21 and that made me to work hard for myself, I did everything from cleaning to serving in my early days but was lucky to get my masters and a good job to support myself. But was also a bit lucky with education, not all the money but some was contributed by my parents for education and not big debt like others

  5. First off, thats an increasingly alarming statistic…speaks of some other deeper structural problems we should be dealing with.
    Second, it becomes even more disturbing once you consider the parents supporting their kids at home, it might be eating into cash they should seriously be stashing somewhere for their retirement.
    And third, although it would sound unfair, but those still nesting should not be left to ride free as it is…I moved out quite early and had to really hustle to do that so I have a hard time swallowing some of the reasons people give. Its a matter of wanting to do it, going out there and making it happen…there is always a way, it might take time to find it but keep trying!

  6. When I moved back home after graduating university, my parents made it way too easy for me. Part of me wanted to move out because I had went away to university and was used to having all this independence, but the other part of me wanted to save money, while enjoying the comforts of home. I didn’t have to pay rent or groceries, only for my car and cell phone. In hindsight, I wished my parents did charge me rent during that time. It would have probably kickstarted my budgeting skills and frugality a lot sooner. I wasn’t foolish with my money. I just wasn’t saving my money to prepare myself for moving out.