With 32.1 percent of 18-34 year olds living with their parents, up from 20 percent in 1960, according to a Pew Research Center study, two clear trends are emerging: (1) more young adults are living with their parents for a longer amount of time, and (2) fewer young people are getting married. I'm going to be writing a 2 part series of blog posts that address why these two trends are emerging in recent decades.
For the first part, here are 3 important reasons explaining why more young adults are living with their parents:
1. Rent costs have gone up faster than inflation. Rent is the bigger factor when it comes to how housing costs make it harder to survive on your own as a young adult, since most young people rent and are not buying a home right out of college. Median rent costs have risen 64% since 1960 when factoring inflation:
3. College costs have gone up fastest of all. And lastly, it's higher college costs primarily that are the reason why so many young adults cannot afford to live on their own: they graduate college with debt levels not ever seen before that they have to pay back and as a result many more young adults today than in the past cannot afford to live on their own. Moving back in with their parents becomes the most viable economic option while they work to pay back their student loans.
|Source: American Enterprise Institute|
And not going to college is not a viable option for many people since many, if not most, professional jobs require a bachelor's degree to even be considered. We can't all be truck drivers and construction workers—jobs that may very well be automated in the next few decades. The argument that people should just forgo college if it's too expensive would literally plummet the number of doctors, scientists, engineers, and other professionals in the US, stalling our innovation and economic growth.
Now according to that same Pew study from above, people with no college are more likely to still be living at home with their parents, showing that a college education will make it more likely that you will be able to move out. But still, the percentage of those 18-34 with a bachelor's degree or more living with their parents is growing, especially since 2000, when college costs began rising faster. So these are the 3 biggest economic factors for why we're seeing more young people living with their parents since 1940.
I'm lucky. When I was 20 years old my grandmother moved out of her rent stabilized apartment and it was up for grabs. So I moved in and had my own place throughout most of my 20s. During that time I went to college, got my degree, and eventually got a decent paying job a few months after graduating. Since then I've gotten an even better job that pays nearly twice what I made at my first job out of college, and so I'm a millennial success story. But my situation is not necessarily average. I'm working a good paying job with great benefits and I'm paying back my student loans. And all I can ask for is that this situation lasts for as long as possible, and that we make better decisions in both the public and private sector that benefit those less fortunate than me because I really want to see the middle class thrive.