An increasing number of young adults are finding themselves stuck living at home with their parents well into adulthood. This trend highlights the urgent issue of lack of affordable housing gripping the nation.
For millennials and Gen Z, the dream of moving out and living independently after high school or college is being put on hold. But there are ways families can make extended living situations work – and even constructive for the younger generation.
Let’s first examine the statistics, painting a concerning picture of today’s housing market.
According to a recent report by Intuit Credit Karma, a staggering 31% of Gen Z adults are currently living with their parents.
This is largely attributed to the inability to afford to buy or rent their own place.
For context, in previous generations, young adults living with parents into their 20s and 30s were far less common. High housing costs have now become one of the biggest obstacles for young people starting out on their own.
This Intuit Credit Karma survey polled over 1,200 Americans aged 18 and up. It aligns with other data pointing to rising trends of multigenerational households in recent years.
Currently, 25% of young adults live in a household with two or more adult generations. That’s more than double the 9% figure from just five decades ago.
Finances are cited as the number one factor pushing families to double up. Today’s young people struggle with burdens like student debt and housing costs at magnitudes their parents never experienced.
Consider that 2023 has been dubbed the least affordable year for home buying in over a decade. The average 30-year fixed mortgage rate has surpassed 6.6% – twice what it was just three years ago.
On top of larger student loan balances, millennials and Gen Z wrestle with lower real wages than the previous generation enjoyed in their 20s and 30s.
Key Takeaway: High housing costs and financial burdens make it difficult for young adults to afford to live independently, leading to a rise in multigenerational households.
If your family is transitioning into a multigenerational home, it’s crucial to discuss ground rules early on to maintain harmony. This helps the adults get on the same page.
Parents – Be accommodating about giving your adult child privacy and autonomy, even under your roof. Refrain from overbearing house rules – just focus on fair expectations like chores and expenses. Offer guidance, not constant directives.
Young adults – Respect it’s still your parents’ home. Take initiative on household tasks without being nagged. Make agreed-upon contributions for costs consistently. Communicate openly when needs aren’t met.
Key Takeaway: Establishing ground rules and open communication can help maintain a harmonious living situation in a multigenerational household.
Living at home rent-free or for low cost gives young adults a valuable chance to save money and build financial stability. Here are some smart budgeting strategies:
Making strategic money decisions now will pay off enormously in the future. Prioritizing savings while costs are low gives you a launch pad to finally live independently.
Key Takeaway: Young adults living with parents should take advantage of the opportunity to save money for their future independence. Budgeting and saving strategies can help build financial stability.
For those itching to move out sooner, there are transitional options that cost less than completely living alone:
Creatively exploring these alternative living situations can get you out of your family home at a more reasonable cost. The financial freedom of adulthood awaits!
Key Takeaway: Consider alternative housing options like shared living, renting a room, relocating or temporary sublets to achieve more independence at an affordable cost.
If you need help managing finances during this life stage, don’t be shy about seeking assistance.
Sit down with a parent or other trusted mentor who can guide you in money management. Their wisdom is invaluable.
For tailored advice, meet with a financial advisor or counselor. They can create a savings plan, discuss debt pay-off strategies, and map your route to future housing goals.
Don’t struggle alone – take advantage of those who want to see you succeed financially as a young adult.
Key Takeaway: Seeking guidance from a trusted mentor or financial advisor can help young adults navigate the complexities of managing finances and achieving independence.
The lack of affordable starter homes and apartments has forced many young people to live with their parents much longer than previous generations. But by embracing open communication, financial discipline, and a drive toward independence, this situation can be temporary.
Lean on your family for support now, but stay focused on the future you envision on your own. With smart planning, budgeting, and saving, you can still achieve that dream despite tough housing economics. Patience and perseverance will serve you well.