What's the most common living
arrangement for young adults today? For the first
time in 130 years, more young people ages 18 to 34
opt to live with their parents, rather than move out
on their own or with a spouse or friend, according
to a recent study by the not-for-profit Pew Research
Center. Here's more on this trend, including
possible reasons, reactions from parents and their
live-in adult children, and financial and social
The "Boomerang" Generation
Pew Research recently sifted through census data to
follow up on its 2012 survey, entitled "The
Boomerang Generation: Feeling OK about Living with
Mom and Dad." The results, announced in late May,
reveal these key findings about young people ages 18
to 34 years old:
In 2014, roughly 32% of young adults lived with
their parents, and 31% lived with a romantic
partner. Compare those statistics to the data from
1960, when about 20% lived with their parents and
62% were married or cohabitating with a romantic
partner. That's a significant change.
Nowadays, 14% of young adults live on their own, are
single parents or live with multiple roommates. The
remainder live with other family members, in group
quarters (such as college dormitories) or in the
home of an unrelated person. These alternatives have
grown in popularity since 1960.
Young men (35%) are more likely to live with their
parents than are young women (29%).
College graduates (19%) are less likely to live with
their parents than are the less-educated (36%).
Black and Hispanic young adults (36% for each group)
are more likely to live with their parents than are
white young adults (30%).
The percentages of young adults living with parents
aren't at their highest historic levels, however. In
1940, about 35% of young adults lived with their
parents — but living with a romantic partner was
even more popular back then. And living
single or with roommates was far less common
than it is today.
The phenomenon of kids continuing to live with
parents into adulthood or "boomeranging" home after
going out on their own isn't unique to the United
States. In fact, it's even more widespread in the
European Union (EU) and Canada.
Eurostat (the EU's statistical agency) reports that,
across its 28 member nations, 48% of young adults
ages 18 to 34 live with their parents. Likewise,
Canada's most recent census found that 48% of young
adults ages 20 to 29 live in their parents' homes.
It's easy to attribute the shift in young adult
living situations to the recession of 2007 – 2009.
But this trend started long ago. Inflation-adjusted
wages have been falling since 1970. Declining
employment rates for young adults over the last few
decades have also persuaded many to return to school
and then live with their parents.
In addition, young people wait longer to get married
today — or skip marriage altogether — compared to
previous generations. Just over a quarter of
Millennials are currently married, compared to the
36% of Generation Xers and 48% of Baby Boomers at
the same age.
More fundamental, however, is the changing stigma
associated with living with parents into adulthood.
Pew reports that more than 60% of young adults have
friends or family members who live with their
parents — and almost one-third of parents report
that finances have forced their kids to return home
in recent years.
Not only is it commonplace to live with parents, but
it's also seen as positive by many people. Pew
Research discovered that roughly three-quarters of
young adults who live with their parents are
satisfied with their living situation and upbeat
about their future finances. That's about the same
satisfaction level as young adults who live on their
own. Parents are reportedly just as happy about
their adult kids living with them.
Financial and Social Implications
Most people presume that live-in adult children are
financially dependent on their parents for support.
While that may be true for the 9% of young adults
who admit to receiving financial support from the
parents, it's not always an accurate assumption.
In some cases, parents also benefit when their kids
live at home. Pew Research reports that 35% of young
adults pay rent to their parents, 75% contribute to
household expenses, such as groceries or utilities,
and 96% perform chores to help chip in. Parents with
annual incomes under $30,000 are just as likely as
those with annual household incomes of $100,000 or
more to say their kids returned home for economic
From a social perspective, parents often encourage
adult kids to live at home. For example, empty
nesters may feel lonely and see this living
situation as a pragmatic way for young adults to
save money for a down payment on a home of their
own. Others see it as a safer alternative to young
adults living away from home in a less desirable,
low-rent neighborhood. Other parents, especially
those who pursued careers before starting their
families, may have health and mobility issues that
benefit from the helping hand of a young adult.
Setting the Ground Rules
Parents need to consider the likelihood that their
kids will live at home into adulthood when planning
their household budget, deciding whether to downsize
their home and timing their retirement plan. It's
also critical to preserving long-term family
relationships (and sanity) for parents to set up the
parameters with young adults before agreeing
to any living arrangement. For example, how will the
kids contribute to the household? How long can they
stay? Are there any rules regarding curfews,
overnight guests, pets, and alcohol and tobacco use?
It may not be realistic to expect adult kids to
follow the same rules that were set when they were
minors. But setting expectations from the get-go
could help minimize future disputes and
dissatisfaction with the living arrangement.
View from the Outside
For better or for worse, in sickness or in health,
adult kids are living at home with their parents in
record numbers. Often this living arrangement is
temporary until the young adult finishes school,
finds a job or saves a predetermined "nest egg." If
you're part of this multigenerational living trend,
discuss the situation with your tax and financial
advisers. They've observed how other families manage
this living arrangement and can offer fresh,
For more information,
Boris Benic, CPA,
or click here to email Boris.
He would be happy to address any questions you may