Economic hardship and rising housing costs in the U.S. have pushed many millennials and many Gen Zers back to their parents’ homes for financial stability and support.
Fewer young adults are leaving the nest permanently, with nearly 50% of millennials and those of Gen Z returning home for financial support, according to a new study by the financial publisher Retirement Investments (RI).
RI’s study looked at survey responses from roughly 1,000 parent participants with children ages 18 to 42 in order to answer the following questions:
- What percentage of young adults still lived with their parents in 2023?
- What percentage of young adults require financial support?
- What were the odds the young adults moved out or reached financial independence sometime this year?
The study results show that parents of both generations are making significant financial sacrifices to support their progeny in 2023.
Some of the study’s most revealing findings include the fact that approximately 40% of Gen Z and millennials now live with their parents without the expectation of moving out this year. 55% of parents say they support their children financially, while 60% believe their children will not be financially dependent in 2023.
In total, two out of every five millennials and Gen Z young adults still live at home, with 1 in 5 parents reporting they have sacrificed retirement savings to help their adult children.
The amount of financial help parents are extending to their kids in 2023 is a bit out of the norm, according to Allison Hadley, Media Relations Specialist at Digital Third Coast.
“While mom’s basement might still be the hottest real estate market for Gen Z and millennials weathering fierce mortgage rates and skyrocketing rents, many parents are doing far, far more than just sheltering their adult children,” Hadley told The Dallas Express.
The primary reasons adult children have for still living at home with their parents include the high cost of housing in the U.S. (54%), still being in school (43%), still wanting to live with parents (33%), having a low-paying job (22%), still paying off student loans (12%), and saving up to buy a house (10%), study results show.
“While 1 in 5 parents feel their children are too dependent on them, a whopping 83% are content with the current arrangement of living with them,” Hadley said.
Some of the ways parents support their kids, according to the study, are by making their meals (68%), doing their grocery shopping (56%), doing their laundry (43%), scheduling their doctor appointments (23%), and waking them up for work (11%).
With kids living with their parents longer than the standard 18 years and nests no longer empty, parents report having to put off vacations, home renovations, hobbies, downsizing and moving, and retiring.
In some cases, parents that have financially independent children are taking the initiative and moving closer to their kids. Of these parents, 1 in 10 say they plan to live with their kids when they retire, while 38% are considering moving in with their kids sometime in the future.
More than half of parents surveyed say they want to live closer to their kids because of grandchildren (67%), while 21% cited saving money on travel costs to visit their family.