April 4, 2017
Why Parents’ Home is the Millennial Crib
A couple years ago, Daniel Cooper noticed something at the commuter rail station near his home in suburban Boston. A lot of parents were dropping off their adult children every morning to catch the train into the city.
This fit with something he’d been thinking about as a Federal Reserve senior economist and policy adviser interested in macroeconomic issues like the housing market. Are millennials living with their parents longer than previous generations? And, if so, why?
His suspicion was confirmed in recent research with his colleague at the Boston Federal Reserve, María Luengo-Prado. They found that, on average, 16 percent of baby boomers born in the late 1950s and early 1960s lived with their parents when they were between 23 and 33 years old. That jumps to 23 percent of the millennial generation born in the 1980s. These young adults are also more likely to return home after living independently for a spell.
The economists landed on two primary explanations for the big shift. One is that young adults today earn less relative to rents in their area. Second, higher state unemployment rates impact millennials more. In short, young adults often live with their parents for the simple reason they can’t afford to live on their own. …Learn More