As the pandemic caused by COVID-19 has continued, more young adults have chosen to move back home with their parents. In 2020, the share of young adults aged 25 to 34 living at home rose to the highest share recorded since 1960: 17.8%, the National Association of REALTORS® reports. That percentage remained high in 2021 at 17%—the second-highest share on record.
“Some young adults may have recently moved back home due to the flexibility of remote work trends and to avoid paying high rents,” writes Jessica Lautz, NAR’s vice president of demographics and behavioral insights, on the association’s blog. “Others may be at a family member’s home due to job losses or while virtually attaining higher education goals. Regardless of the reason, living with family may provide a benefit to potential first-time home buyers.”
About half of young adults surveyed who became first-time home buyers say they were making rent payments to family as they stayed at home.
However, other young adults have been able to live rent-free while they save for homeownership. Living at home could allow them to pay off their debts, improve their debt-to-income ratio, and save for a down payment.
“While living at home may not be an ideal or even a long-term scenario for many families, if prospective first-time buyers can move home before purchasing, this might financially help them save to purchase a home,” Lautz says. “The added flexibility of living with family allows a buyer to better navigate the tight housing market.”
Source: “Young Adults Are Returning to Their Family’s Homes, But for How Long?” National Association of REALTORS® Economists’ Outlook blog (Jan. 26, 2022)
