August 05, 2015
A new study from the Pew Research Center has found that despite the improving economy, more millennials are living with family now than they did during the Great Recession.
As of the first four months of this year, just 67 percent of adults ages 18 to 34 are living independently, compared to 71 percent in 2007. The rest live with their parents or another adult relative.
This, even though the unemployment rate for young adults has declined for the past five years. It’s now at 7.7 percent, fewer than two points away from going back to pre-recession levels.
"Living arrangements seem to have come unhinged from cyclical labor market conditions as all young adults have become less likely to live independently as the recovery has progressed," the study said.
In fact, fewer young adults live independently today than in 2010, when the unemployment rate for their age group reached a peak of 12.4 percent.
The study defined "living independently" as living in a household that is not headed by an adult relative (besides one's spouse). Full-time college students under the age of 25 weren’t counted, as many of them live in dorms.
Just 40 percent of millennials head a household themselves.
"This may have important consequences for the nation’s housing market recovery, as the growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations and other ancillary purchases that accompany newly formed households," the report noted.
The person most likely to be living in his parents' basement? A man with no college degree.
Eighty-six percent of college-educated 25-to-34-year-olds live independently, compared to 75 percent of less-educated young adults. And 72 percent of millennial women live independently, while only 63 percent of men do.
Katy Osborn, writing for Time, has advice for millennials still living with the old folks to prepare for their transition to independence:
• Write down a pretend budget for what you would spend on rent, groceries, etc., even if your family is covering it.
• Start your job search as early as possible.
• Set an official deadline for when you're going to leave.
• Rethink your identity and your priorities when it comes to the things you really want to spend money on.
• Don't be afraid to still ask your parents for help.
Pew’s data shows that it’s not just the economy that affects when young adults move into their own households. The Great Recession may be over, but millennials are still cautious about whether it’s safe to leave the nest.