By Alice Kantor
The rising cost of living is forcing more people to move back in with their parents. Others are finding it impossible to move out.
And it’s not just young adults who are struggling — the pandemic and surging prices for everything from rent and electricity to food and gas have pushed a record number of people, including those in their 40s and 50s, to return to their parents’ homes.
The share of Americans living in multigenerational households more than doubled between 1971 and 2021, to 18% of the population, and shows no signs of peaking, according to a recent Pew Research survey. Among adult children living with their parents, more than half say it helps them financially, and 30% say they pay nothing toward the rent or mortgage. Meanwhile, a recent Credit Karma survey found that 29% of people between the ages of 18 and 25 live at home with parents or relatives and see it as a long-term housing solution.
People tend to move back in with their parents when they’re hit with an unexpected life event, like a divorce or job loss, experts say. But some also choose to move back so they can save up to buy a home or to afford a bigger place when they get married or have kids. With the rising cost of housing, this intermediate period can end up lasting longer than expected.
“The pandemic has hit vulnerable people’s finances of all ages,” said Shreya Nanda, an economist at the UK-based Institute for Public Policy Research. “That, combined with a dysfunctional housing market and wages that haven’t kept up with the growing cost of living, explains why many people need to live with family again.”
While people in their 20s and early 30s constitute the largest demographic of people living with parents — some because they never left — older people are also returning to the nest in order to deal with their own economic pressures and to help care for elderly parents, said Jenna Abetz, associate professor at the College of Charleston and author of recent research on multigenerational households in the US.
And it’s not just the US. In the UK, 3.6 million people aged 20 to 34 were living with their parents last year, 1.1 million more than 20 years ago, according to the Office of National Statistics. In Portugal, the average age of someone leaving the parental nest rose from 30 in 2020 to 34 the following year, according to European Union data office Eurostat. Other European countries, including Sweden and Belgium, also saw increases.
‘Stuck Here’
Ian O’Sullivan, 57, moved back in with his parents in west London when he and his wife split up five years ago. Reliant on a low-paid public sector job, the librarian sought a two-bedroom rental last year to be closer to his two sons in south London, but was unable to find anything he could afford.
Coming back to his parents’ house was supposed to be temporary, but with London rent prices up , his £1,650 monthly net pay isn’t enough to move out.
“My salary just about scrapes it, so I’ve been stuck here,” he said.
Despite the stigma of moving back in with family members, the decision — even for a few months — can help people stabilize their finances.
Xian Horn, a freelance writer in her late 30s, lived with her parents in New York during the pandemic to save on food and rent. That allowed her to finally pay off the growing amount of credit card debt she accrued from eating out and other living expenses, which added up to about $1,000 a month when she was only earning $1,000 to $1,100 some months, and sometimes nothing at all.
“Up until six months ago, I was at a deficit every month,” she said. “This decision really saved me.”
Financial Security
While moving back with parents has been a lifeline for some, others are finding the current cost of living makes it hard to leave.
Feeling lonely and looking to save on rent, Tory Gervay, 31, moved back in with her mom in Sydney in 2019. She changed industries, put some money aside and is now looking to move out. But the high housing prices in Australia mean she can’t afford to move for at least a few more years.
In Australia, 26% of households had an adult child living at home, according to a 2020 Finder survey. Rental prices rose 13% year-over-year, according to July data from SQM Research, and home values were up 17%.
“I have no idea how I could possibly afford any of it,” she said. “I told my mom, ‘I’m going to be living with you forever.’”
While moving home can make sense financially, there can be a stigma attached for adults. Ryan Nicotra, 32, moved in with his parents last year when he lost his job as a university fundraising manager in Baltimore.
Spending a year at home with his family in rural Maryland, he was able to feel financially secure for the first time in his life. He saved enough for an emergency fund and found a new job without the stress of stretched finances. Now living on his own in nearby Westminster, Maryland, he acknowledged that giving up his city life was difficult.
“I had an idea of what life would look like, and giving that up was hard,” he said. “But I don’t regret it: It was the first time in my adult life I had real financial security and abundance.”
More stories like this are available on bloomberg.com.
