Millennials staying longer with parents

Many of America's young adults appear to be in no hurry to move out of their old bedrooms.

For the first time on record, living with parents is now the most common arrangement for people ages 18 to 34, an analysis of census data by the Pew Research Center has found.

And the proportion of older millennials — those ages 25 to 34 — who are living at home has reached its highest point (19 percent) on record, Pew analysts said.

Nearly one-third of all millennials live with their parents, slightly more than the proportion who live with a spouse or partner. It's the first time that living at home has outpaced living with a spouse for this age group since such record-keeping began in 1880.
The remaining young adults are living alone, with other relatives, in college dorms, as roommates or under other circumstances.

The sharp shift reflects a long-running decline in marriage, amplified by the economic upheavals of the Great Recession. The trend has been particularly evident among Americans who lack a college degree.

The pattern may be a contributing factor in the sluggish growth of the U.S. economy, which depends heavily on consumer spending. With more young people living with their parents rather than on their own, fewer people need to buy appliances, furniture or cable subscriptions. The recovery from the 2008-09 recession has been hobbled by historically low levels of home construction and home ownership.

Jennifer Post, 26, has been living with her parents in Villas, New Jersey, since dropping out of law school two years ago.

A law career wasn't a good fit for her, Post decided, and now she's seeking a job in digital media or marketing. There aren't many opportunities in Villas, a beach town.

Even living at home, she said it's been hard to save for a move to a bigger city after she was laid off from a baking job in March.

Post spends her days on her laptop, sending resumes and refreshing LinkedIn and other job sites. To her parents, it looks as though she's slacking off.

"It's definitely a generation gap," she said. "I think they literally think I just sit down and watch Netflix all day."

As recently as 2000, nearly 43 percent of young adults ages 18 to 34 were married or living with a partner. By 2014, that proportion was just 31.6 percent.

In 2000, only 23 percent of young adults were living with parents. In 2014, the figure reached 32.1 percent.

The proportion of young adults living with their parents is similar to the proportions that prevailed from 1880 through 1940, when the figure peaked, Pew found. Yet in those decades, the most common arrangement for young adults was living with a spouse rather than with parents.

"We've simply got a lot more singles," said Richard Fry, lead author of the report and a senior economist at Pew. "They're the group much more likely to live with their parents."

The typical U.S. woman now marries at 27.1 years old, the typical man at 29.2, according to census data. That's up from record lows of 20.1 for women and 22.5 for men in 1956.

"They're concentrating more on school, careers and work and less focused on forming new families, spouses or partners and children," Fry said.

The shift may also be disrupting the housing market. One mystery that's confounded analysts is why there aren't more homes for sale. The lack of available houses has driven up prices and made it less affordable for many would-be purchasers to buy.

Nela Richardson, chief economist at real estate brokerage Redfin, says one explanation for the sparse supply is that many baby boomers aren't able to sell their family homes and downsize for retirement because they still have adult children living with them. Redfin surveyed homeowners ages 55 to 64 and found that one-fifth still have adult children at home.

"It's having a big effect on the housing market," Richardson said.

Among young men, declining employment and falling wages are another factor keeping many 18-to-34-year-olds unmarried, Fry said. The share of young men with jobs fell to 71 percent in 2014 from 84 percent in 1960 — the year when the proportion of young adults living outside the home peaked.

Incomes have fallen, too: Wages, adjusted for inflation, plunged 34 percent for the typical young man from 2000 to 2014.

Other factors contributing to more millennials living with parents range from rising apartment rents to heavy student-debt loads to longer periods in college.

Many analysts had expected that as the economy improved, younger adults would increasingly move out on their own. That hasn't happened. Jed Kolko, a senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley, says soaring rents are discouraging some from leaving their parents' homes.

Kolko's research has found that the share of young adults living with parents in the first quarter of 2016 was essentially unchanged from two years earlier.

Median rents nationwide were surging at a 6 percent annual pace as recently as August, though they have slowed since. In fast-growing cities like San Francisco, Denver, and Portland, Oregon, rents rose last year at a double-digit pace.

Heavier student debt loads have sent more young people back to their parents' nests, according to research by economists at the Federal Reserve Bank of New York.

Other economists aren't convinced that student debt plays a dominant role. They note that the proportion of young adults without college degrees who live with parents is especially high: Nearly 39 percent of those with only a high school degree were living with a parent in 2014, up from around 26 percent in 2000.

That compares with just 19 percent of young adult college grads living at home in 2014. That figure, though, is up sharply from 11 percent in 2000.

Still, economists say most millennials appear to be delaying, rather than avoiding, marriage.

Casey Marshella moved back in with her parents in Fairfield, Connecticut, after graduating from Boston University last year. Just this week, she moved into an apartment with her sister. Within weeks, she and a friend — who also lives with her parents — expect to find their own place.

Marshella, 22, says living at home has helped her save money from her job as a human resources specialist. Because many people her age share the same circumstances, most sympathize with her.

Still, Marshella says their first question is usually, "So when are you planning on moving out?"