Speaker 1: About one in three Americans between 18 and 34 years old live with their

Speaker 2: parents. And while you may have heard more about this recently, this trend isn't new. Between 2005 and 2015, the share just grew very steeply over this 10-year period. Since then, it's been fairly stable. There was an uptick, of course, during the pandemic. In the wake of the pandemic, those rates of parental co-residents are now about where they were right before. Part of the reason we see this escalation of young adults not leaving the nest or returning to the nest is this idea that it was harder and harder for them to weather shocks.

Speaker 1: Nearly 30 percent of Gen Z said they would like to save, but don't make enough money. And roughly two in five millennials and Gen Z adults feel it's harder to build financial wealth now than when their parents were their age because of the economy. 27-year-old Victoria Franklin has been living with her mother in New Jersey since she graduated college in 2019.

Speaker 3: I saw all of the money that I was saving and I thought, maybe I should

Speaker 4: stay home for a little bit. And I didn't feel an urgency to move out. Not everyone is enthusiastic about this trend.

Speaker 5: You guys are making six figures together. You can't tell me you can't afford a house. They just don't want to spend their money.

Speaker 1: Told ya. 36 percent of Americans said in a 2022 survey that more young adults living with their parents is bad for society. So here's why young Americans are choosing to live with their parents and what the implications are for the U.S.

Speaker 3: economy. My name is Victoria Franklin. I am 27 years old and I live in my childhood home with my mother and my

Speaker 1: boyfriend. Victoria graduated from the University of Miami in 2019 and moved in with her mom when she was looking for a job.

Speaker 3: Right after I saw the cost of living and things like that, after I graduated that maybe I'd be home for about a year.

Speaker 1: More than half of Gen Z adults say they don't make enough money to live the life they want due to high cost of living.

Speaker 3: I ended up bartending and waitressing until October, where I got my first offer. So it did take a little bit longer than I expected. Currently live at the Jersey Shore and I was commuting into New York City, which takes about two hours each way. And I thought, you know, in six months or so, I'll move into the city, be closer to the job. And the pandemic threw a wrench in those plans.

Speaker 1: Victoria now works a fully remote job, which she says she probably wouldn't have if it weren't for the pandemic. Without a commute to worry about, she was able to stay at her mom's for

Speaker 2: longer. It's a lot harder for young people today to save up for, you know, markers of the American dream than it was for previous generations. Part of the reason we see this escalation of young adults not leaving the nest or returning to the nest is this idea that it was harder and harder for them to weather shocks. And so, for example, if they suffered a layoff or they suffer some sort of health shock or they got in a car accident, if they didn't have any additional credit to weather that shock, they would end up moving back home. The financial stability of young adults, their ability to pay for things if they got into an emergency, was one of the big factors influencing whether or not they were living on their own or living with their parents.

Speaker 1: A significant number of Gen Z adults and millennials lack emergency savings. In fact, 46 percent of millennials and 32 percent of Gen Z have more credit card debt than emergency savings. This can have ramifications for setting up a financial future. Roughly one in four Gen Z adults say housing costs are one of the biggest challenges to financial success.

Speaker 2: The prices of homes has escalated over the last few decades much faster than actual incomes. So it is actually much harder for a millennial or a Gen Z to save up for a down payment to buy a home. And that's something that bears out in the data. The pandemic did have a lot to do with it.

Speaker 3: I saw how much I was saving and I was like, oh, maybe I shouldn't be paying, you know, upwards of three thousand dollars a month and making somebody else richer when I could stay at home, save that money and spend it on where I want to spend it. Between my job and my bartending and waitressing, I make anywhere from eighty five to ninety five thousand dollars a year. I would say about 40 to 50 percent of my salary is going right into savings. My mentality is why rent and give my money to someone else when I can start to own. And so a big chunk of that money is going to go towards a down payment on

Speaker 1: the house. Young adults ages 25 to 34 in high cost of living areas are more likely to live with their parents. Nearly 26 percent of young adults in New Jersey were living with at least one of their parents in 2022. The median household income in Oceanport, New Jersey, where the Franklin's live, was nearly one hundred and thirty three thousand dollars in 2022, while the median value of a home in the region was around six hundred and forty four

Speaker 3: thousand dollars. My dad built this house for three hundred fifty thousand dollars and was making probably ten to fifteen thousand less than I was. My mom wasn't working at the time and they were able to afford a three hundred fifty thousand dollar house on a 70,000 dollar a year salary with a son. And that is just that's not even the American dream anymore. That's not even possible. My aunt, who I fight with all the time, is always saying how you have to give somewhere. Right. And my cousin said something to her the other day and said, we're giving everywhere. We don't get property. We don't get good school systems. Whatever we're trading off is too much to trade off.

Speaker 1: Victoria had brought up some conflict with her aunt a few times.

Speaker 3: Oh, this is my aunt Judy.

Speaker 1: So I asked aunt Judy to come on over and talk to us. I talked about how much we fight about millennials.

Speaker 3: Yes. But millennials living at home and how you always say, well, you have to sacrifice something. But but how much we're sacrificing. We don't get like a big property or we don't get like a nice house or it's not in a good school system. You have to start somewhere. You have to start anywhere.

Speaker 5: Just start your portfolio is what I told you. I don't care what it is. No, but you were able to live in Oceanport the first time. OK, I guess it was different times. Gen X and baby boomers may have a tougher time understanding what young adults

Speaker 2: are going through today because they enjoyed until the pandemic recession hit, you know, a solid almost 15 years of uninterrupted economic expansion. Baby boomers, Gen X, they weathered many economic downturns, including major recessions. But I think the big difference is that they're not just starting to form their own households and starting to accumulate wealth. Housing and higher ed were both more affordable relative to their incomes than they are now. But I started out I was making thirty five thousand dollars a year. That was nothing. And he was making thirty five thousand dollars a year.

Speaker 5: You guys are making six figures together. You can't tell me you can't afford a house. They just don't want to spend their money. Oh, yeah. No, I don't know what you want. What was one of the things that you were able to do that you were able to do no, no, no. What was my first house? Two hundred fifty, maybe two hundred and seventy.

Speaker 3: That doesn't exist anymore. Where am I finding a two hundred seventy thousand dollars?

Speaker 5: I'm not making thirty five thousand dollars a year combined. We made 70.

Speaker 1: In 1995, seventy thousand dollars was the equivalent of one hundred forty five thousand dollars today.

Speaker 3: Look at that. See.

Speaker 2: We do also have a situation that what is really good for an individual person or an individual family is not necessarily good for the entire macro economy. The Federal Reserve estimates in a 2019 paper that young adults

Speaker 1: who move out of their parents' house would spend around thirteen thousand dollars more per year on things such as housing, food and transportation. One of the big boosts to consumer spending is when people form households,

Speaker 2: whether you're a renter or a buyer, you need to furnish that house. You need to fix things up in the home to make it livable. You end up spending a lot of money during that time. So if the pace of household formation slows down, then that's going to slow down the pace of consumer spending and that will produce a drag on the economy. Another issue is that there aren't enough affordable properties in popular areas for younger people who are in entry level jobs and making less

Speaker 1: money. Any sort of housing policy needs to be

Speaker 2: multi-pronged. Are there homes that are at the price point of these prospective homebuyers? What can we do to increase the housing supply? What can we do to build? What can we do to help elder Americans to help them downsize and move into more right-sized homes that will open up larger homes for young families? So I think one alone is not really going to do it. We've got to look both at demand as well as supply. The other major factor here is how much student loan debt young Americans

Speaker 1: have. Fifty nine percent of U.S. adults say they've delayed financial milestones because of their student debt. I do have a student loan payment. It's about $480 a month.

Speaker 4: So that's my largest expense. The liability could be worse for Black borrowers who tend to have higher than average student loan debt and less wealth than white counterparts.

Speaker 1: Black and Hispanic respondents were more likely to say that debt was holding them back from reaching financial milestones. Less than half of white respondents said the same. The amount of debt young adults held also rose to $1.5 billion a year. The amount of debt young adults held also rose substantially between 2005 and 2014 during that period of strong escalation in that cohort living with their

Speaker 2: parents. Aggregate student loans are such an enormous part of the economy now, and that's not a reflection of younger people making bad choices with their education. It's really consequence in large part due to the fact that there's less public funding and going to college just is more expensive, which makes it even harder for even those college grads who are hoping to get earning more money as a result of their college degrees.

Speaker 1: Student loan debt by itself can't explain the phenomenon, especially considering so many European countries with much less student loan debt have higher rates of young adults living with their parents. 24 out of 29 European countries had more 18 to 34 year olds living with their parents in 2021 than the U.S. It was over 70 percent in Italy, Portugal, Greece, Serbia and Croatia.

Speaker 3: My boyfriend is Brazilian and multi-generational homes are very common in almost everywhere else in the world except in the United States. So I'm just taking a page of their playbook.

Speaker 6: The Americans are probably the only people that they're not multi-generations in one house. And I don't have a problem with it. I mean, I think it's kind of nice. Why do we have to be so cold to push everybody out?

Speaker 2: You know, there are a lot of cultures out there in which it is normal to live with your parents until you get married. And I don't think there's necessarily an economic explanation for that.

Speaker 1: The Franklin's would say in the U.S. it is the economy, but Victoria's mom is kind of OK with it.

Speaker 6: Unfortunately, it is the economy and the world that we live in that just doesn't allow them to go live a comfortable life. So with them living here was no big deal. It's not really a problem. They're saving their money. Eventually they'll buy a house and that works.