The number of young Americans living with their parents is at a record high, with Gen Zers facing a daunting job market and a housing market that is a mess. The typical milestones of getting married, having children, and buying a home are drifting further into the future. A recent analysis of census data by John Burns Research and Consulting reveals that nearly a fifth of 25- to 34-year-olds live with their parents or grandparents, a record high. This trend is not unique to Gen Zers; millennials also experienced a similar path after the Great Recession, spending their early careers scrounging for jobs and crashing with their parents to save cash. However, the millennial comparison may offer some hope for Zoomers, as the oldest millennials own homes at roughly the same rate as their Gen X predecessors.
Younger adults have yet to reach that point, and the share living with parents jumped in 2020 during the height of the pandemic, but trended downward in the next couple of years as borrowing rates plummeted and companies hired with gusto. The job market for young people was white-hot, but then came the spring of 2022, when the era of ultra-cheap home loans came to an abrupt end. Interest rates spiked, making all kinds of borrowing more expensive, and the job market hit the skids. The homeownership rate for young adults fell for two consecutive years, erasing the steady gains made from 2017 to 2022.
The sudden shift in the market outlook was compounded by longer-term trends, like the shrinking pool of "starter homes" — cheaper, entry-level places that allow younger homeowners to start amassing equity. Given the rising costs of land, materials, and cutting through red tape, homebuilders are pivoting to more lucrative projects that favor older buyers with deeper pockets. Renting a non-mom-and-dad-owned place is more expensive, and a study a few years ago by the Federal Reserve Bank of St. Louis found that 36% of older Gen Zers were sitting on student debt, compared to 31% of millennials at the same life stage.
Chiamaka Onyemelukwe, 35, has lived with her mother in Alameda, California, since finishing her master's program in 2018. She dreams of working as a storyboard artist for a TV or film company, but has spent the past couple of years job-hunting after being laid off in late 2023. Nick Chapman, 30, works in film marketing and recently moved home to the Southern California suburb of Simi Valley. Though he could afford the $1,550 monthly rent at his old apartment in Los Angeles, the cost pressures of living on his own left him feeling "stagnant," with little room to save or splurge.
The prevalence of those working but still living at home suggests "this is a housing cost story, not a jobs story," writes Hannah Jones, a senior economist at Realtor.com. Of the roughly 7.5 million 25 to 34-year-olds living at home, seven in 10 are employed. Elizabeth Gomes, a 29-year-old in San Diego who works in public relations, lives with her parents and enjoys a rich, full life enjoyed by young professionals in big cities around the country. She travels, dines out weekly with friends, and enjoys going to concerts and Disneyland.
Mark Fleming, the economist at First American, offers a counterpoint to all the handwringing. "I think a lot of times the data is interpreted as, 'Well, they will never become homeowners,'" Fleming tells me. "That's not true." Fleming counseled similar patience when elder millennials were in dire straits, and he points to their rising homeownership rate as evidence that a delay doesn't equate to total discouragement. Extend some of these chart lines into the future, and the group may surpass Gen X in terms of homeownership. "It just took time," Fleming says.
All signs point to the idea that once Gen Zers find their financial footing, they're likely to jump into the housing market. Finnigan views the delay as pent-up demand — people waiting in the wings to live on their own once conditions improve or the timing feels right. "They'll catch up at some point," Finnigan tells me. "It's just a matter of when."
James Rodriguez is a correspondent on Business Insider's Discourse team. His pieces tackle the most fascinating storylines in real estate, helping readers make sense of an ever-shifting housing landscape.
