Fannie Mae’s What Parents Tell Us About Their Adult Children Living At Home, finds that financial constraints are the primary reason adult children between the ages of 18 and 34 continue to live with their parents. Other factors include marital status, age of the adult child, and parental preference. The percentage of 18 to 34-year-olds living with parents has increased steadily since the beginning of the recession, reaching 31% in 2013. This trend is contributing to slow rates of household formation and reduced housing demand.
The data used in the study are based on responses from 368 parents of adult children living at home in the fourth quarter of 2013. Of those parents, 221 had adult children between the ages of 18 and 22, and 153 parents had adult children between the ages of 23 and 34. The primary reasons cited for adult children living at home included saving money while enrolled in school (29%), and not having enough income to live on their own (23%).
There were some significant differences between the two age groups. A far higher percentage of adult children ages 18-22 were not employed (40%), compared to those ages 23-34 (26%). The primary reason for living at home for 18 to 22-year-olds was to save money while enrolled at school (40%), while only 14% of 23 to 34-year-olds cited this as a primary reason. The primary reason for living at home for 23 to 34-year-olds was not having enough income to live on their own (24%), followed by not being married (16%).
Although many adult children live at home, many anticipate moving out within two years. Fifty-two percent in the 23-34 age group expected to move out within two years, compared to 38% in the 18-22 age group. Half of the 23-34 age group expected to rent; only 30% anticipated buying a home upon moving out of their parent’s home. Of the 18-22 age group, 58% expected to rent, and 26% expected to buy a home upon moving out. The pace of household formation among adult children living with their parents will depend on their financial prospects if the economy improves.
What Parents Tell Us About Their Adult Children Living At Home is at http://bit.ly/1p8psB0