Amid extreme economic uncertainty and few job prospects, most young adults have moved back in with mom and dad.
In fact, for the first time ever, the majority of 18- to 34-year-olds now live at home with their parents, according to a recent study by the Pew Research Center.
As of July, 52% of millennials were living in their parents’ home, up from 47% in February, according to the Pew analysis of Census Bureau data, surpassing the previous high hit in 1940, when 48% of young adults lived with their parents.
“In a very short space of time, we are now at levels last seen during the Great Depression,” said Richard Fry, a senior researcher at Pew.
The number and share of young adults living with their parents jumped across the board for men and women, all racial and ethnic groups and in every geographical region, Pew found.
Although the coronavirus crisis has taken a significant toll on all Americans, young adults have been particularly hard hit.
With many college campuses closed, undergraduates are forced to move back home and study remotely or take a gap year.
Those with a newly minted diploma face the worst job market in modern history, with more student debt than ever before, putting a severe strain on their financial circumstances. Seven in 10 seniors graduate in the red, owing about $30,000 per borrower, according to the Institute for College Access & Success.
And those already in the workforce are more likely to lose their jobs or take a pay cut.
In less than six months, the share of 16- to 24-year-olds who are neither enrolled in school nor employed more than doubled due to Covid-19 and the economic downturn that followed, according to Pew.
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Even before the pandemic, young adults were increasingly dependent on their parents. About 6 in 10 parents with children between the ages of 18 and 29 said they have given their kids at least some financial help in the past year — primarily for recurring expenses such as tuition, rent, groceries or bills, Pew said.
For parents, however, supporting grown children can be a substantial drain at a time when their own financial security is at risk. From medical coverage to auto insurance, groceries and Netflix, there are hidden costs to having young adults living at home that can derail the best made retirement plans.
Further, once young adults move home, it may be hard to move back out “given their difficulties in the labor market,” Fry said. “Time will tell how prolonged it will be.”
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