The increase in adult children living with their parents has raised important questions regarding household formation and its impact on owning, renting, and the demand for new housing construction. The percent of young adults, aged 18 to 34, who are living with their parents has increased from an average of 27 percent between 1990 and 2006 to 31 percent in 2013 (a total of approximately 22 million).1 Because young adults, especially the older ones, traditionally represent a substantial share of first-time homebuyers, their delayed decision to form a household has contributed to a depressed rate of household formation and housing demand. Young adults also have been experiencing higher rates of unemployment and delayed marriages. 2

In the latest National Housing Survey Topic Analysis, Fannie Mae’s Economic and Strategic Research Group examines the reasons why young adult children are living with their parents.3 In this study, we analyze National Housing Survey data based on responses from parents about their young adult children who are living with them. The National Housing Survey interviews adult financial decision makers of a household; therefore all responses are from the parents’ perspective. To provide further insights, we analyzed parents’ responses for two age groups of young adults living with them, 18-22 year olds (“younger adult children”) and 23-34 year olds (“older adult children”).

Financial Concerns Are the Primary Reason

Survey results (see Chart 1) show that financial reasons are the primary response given by parents for why their adult children are not living in a separate home. Parents say by a large margin that the younger (age 18-22) adult children are living with them because “they are saving money while enrolled in school.” Also, given that the vast majority of this younger age group has been reported in our survey as “not currently employed in a paying job” or “employed part-time,” this impedes their ability to live on their own.

When asked about their older adult children (age 23-34), parents’ responses were more diverse. Their top responses include:

  • “They do not have enough income to live on their own.”
  • “They are not yet married.”
  • “They are saving money while enrolled in school.”

Overall, financial concerns, in aggregate, also are the primary reason among the older age group for living at home, even though half of this group is employed full-time.

Chart 1


Most Parents Prefer Adult Children to Live with Them

The results also suggest that parents may play a role in encouraging their adult children to live with them. As Chart 2 shows, 68 percent of parents with adult children living at home responded that they prefer their adult child to continue living in their home.

Chart 2


Interestingly, the survey shows a difference in financial situation attitudes among parents with younger adult children compared to older adult children living at home. A higher share of parents with younger adult children responded that their past personal financial situation has gotten better and/or their future personal financial situation is expected to get better (5 percent and 11 percent higher, respectively) compared to parents with older adult children. The parents with younger adult children also are more often employed full-time, which could be due partially to age differences among the population of parents, though reported rates of retirement are similar.

The analysis also shows significant differences between the attitudes of parents with younger and older adult children regarding the potential for their children to move out of the parental home. As Chart 3 shows, 52 percent of parents with older adult children expect their children to move out in less than 2 years, whereas parents with younger adult children were almost evenly split between less than 2 years (38 percent) and 2 to 5 years (34 percent). For both age groups, the majority of adult children living with parents expect that they will more likely rent than buy a home when they move out of their parents’ house.

Interestingly, the 2012 American Community Survey (ACS) shows for those householders 34 years old and younger that the percentage of those renting was 67 percent and the homeownership rate was 33 percent. When we adjust Fannie Mae’s National Housing Survey results to be more comparable to the ACS results by considering only the rent and buy populations, the data show 66 percent are more likely to rent and 34 percent are more likely to buy for those 34 years old and younger  – very similar to the ACS results.  This could imply that young adults currently living with their parents may not have a substantial impact on shifting the near-term homeownership rate when they do move out of their parent’s home. It is important to note, however, that a recent National Housing Survey study found that more than 90 percent of young renters said they are likely to buy a home at some point in the future.

Chart 3


Overall, results suggest that a combination of personal financial constraints, age of the adult child, and parental preferences encourage young adults to live with their parents. Given most parents’ preference for the adult children to remain at home and the potential for a mutually beneficial experience, we will see if this becomes a more permanent lifestyle trend that slows household formation even as the economy improves. Given that financial reasons account for the vast majority of parents’ responses for why their young adult children are living with them, it seems likely that these young adult children, especially older young adults, will start to form their own households once they feel confident about their financial situation and future prospects.

To learn more about this study, read our Fannie Mae National Housing Survey Topic Analysis.

Stephanie Postles
Strategic Planning Analyst
Economic & Strategic Research

Category: Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Why Are Young Adults Living with Their Parents and When Will They Move Out?”

  1. Labeets says:

    They do not have enough income to live on their own.
    They are not yet married.
    They are saving money while enrolled in school.
    What a pile of crap, the reason they are living at home is because you are an ‘Enabler’.
    The longer you allow your over ’21′ year old to live at home it just creates more dependency
    and you are not allowing your child to become an adult.
    They will come to you to pay off their debts, car payment, all while they are out 5 nights a week at some
    Martini bar and vacationing in Las Vegas.
    Get a grip parents and stop raising a bunch of ‘Pussies’.

  2. morikahn says:

    Hah, I love the sarcasm. You nailed the impersonation of a right-wing nut job that is glued to FOX news and has absolutely no concept of the current economic situation young people are going through.

    Humor aside, its pretty bad in Southern California when it comes to what the rent of an apartment is compared to wages available. I remember mid-90s when rent rates started to skyrocket compared to median income. Apartment complexes started to run out of parking space as people could no longer afford to rent an apartment without a roommate or two.

    Never got better.

    • Labeets says:

      Sorry to offend you, you must still be living at home.

      By the way, I’m liberal but don’t believe in ruining my kids lives by supporting all their habits.
      You raise them, educate them and send them off.
      There not saving squat, there out living the good life on the parents dime.
      Who you crappin ?

      • Biffah Bacon says:

        Liberals usually understand the ‘there, their, they’re’ distinction. In any case how is it any different from the old farming days? Surely not all of this demographic is an army of pampered princes and princesses sponging off mom and dad. Maybe it’s time to rein in the more brutal parts of the religion of capitalism and make it possible for regular folks to survive?

  3. SumDumGuy says:

    Just sayin, but I find humor when the “Free Love, Drugs, Sex, and Rock n Roll” hippy generation of the 60′s tries to shame the Millenials for just wanting to save some $$ from paying rent. Memory is short, I guess?

  4. WallaWalla says:

    It’s hard to tell if you’re being facetious or just being pretentious and derogatory.

    Higher education is incredibly expensive while the part-time work available to students pays next to nothing. Many of these young people, justifiably imo, have decided to live at home rather than taking on substantially larger student loans.

    Along those same lines, if a person does not have enough income to live on their own, they can either use their family for support, or they can run up the credit card bill.

    It seems to me that these young people are making smarter financial decisions which will empower them to buy that first house when they are able.

    I’m not sure where you get the impression that all these young adults are drinking away their savings and partying in Vegas.

  5. supercorm says:

    I left home when I was 17 for college, then got my own appartment and car when I was 18, working almost full time at $5/hour to pay for all this by myself. Would I do it again ?!
    Its not because you can afford a rent and/or a car that it is a sage decision to do so. I feel the new generation very responsible. If they are actually staying at home because they want to “save” for the future, then good for them. If they are contributing monetarly (and phyisically) to take care of the house, then even better for the parents if they feel comfortable having the kids at home. If the kids are staying home because they cant afford and they aren’t doing much to change the situation, then its bad. But overall, for what I see, the new generation seems to know what they want -or don’t want-, few are willing to change their lifestyle (good and bad), but are overall very responsible and logic in their choices.

  6. Livermore Shimervore says:

    Too bad they didn’t report how much these young adults are managing to save before venturing into the rental market. Are they living at home and saving nothing or next to nothing? Or is the average young adult living with family making a significant dent in student loans or at least building up a sizeable savings account?

    On another note, I really hope these kids don’t throw away their money on real estate. It is precisely when you have the longest time horizon that you want to avoid the hugely expensive pipe dream of home ower-ship. It is precisely when you are young and seeking career advancement that you do not want to be tied down to employment possibilities of one or two area codes. An it is when you are young that you least understand the pitfalls of putting all your eggs in a property bet that could turn on you in severe fashion leaving you underwater and ruined (See 2007-to present). Meanwhile aggressive investments in the actual performing markets can pay off handsomely — something you can’t do if all of you income is going to mortgage interest, property tax, maintenance, etc., all rising above the rate inflation.
    Previous generations were not well educated in finance and personal investing during high school and college. They were pushed into the idea that home ower-ship is the natural thing to do. Back when you could actually get rich from selling your home. But those days came and went while people continued chasing this real estate mirage and today our savings rate is unsurprisingly stuck at nearly nothing. Hopefully with this new generation, who may well end up earning less than previous generations, will at least be smarter about growing their money. This living with parents could be the gateway to a more financially astute and mobile generation.

  7. kaleberg says:

    Most of the young people I know have graduated college and are making from 1.5x to 2x the minimum wage, but they’re scrambling to get 30 hours a week. That’s the way it is now. They might be able to afford to share an apartment, but for most it would be a stretch, and in the off season, when hours drop closer to 20 a week, they’ll be extremely tight if they can make it at all. That’s just our new economy. Economists and think tanks have been arguing for it and we’ve been voting for it for years.

    When liberal dinosaurs stalked the halls of Congress, it was quite possible to get out of school and get a salaried job or closer to 40 hours a week, and actually have prospects of getting higher pay. Young people could afford to get their own apartments or even buy a house. Companies just weren’t very efficient then, so they’d pay a lot more for labor and bought more labor hours than they actually needed. The minimum wage was much higher back then, and housing was a lot cheaper, partly because of massive government subsidies to build out the suburbs. The government’s gotten more efficient too. It wouldn’t dare subsidize someone clearing less than a million a year these days.

  8. LiberTea says:

    Being regarded as ‘adult’ and independent at age 18 is a strange American phenomenon.

    In most cultures of the world historically, children live with parents until they have a reason to move out, typically marriage or perhaps a remote job.