In reality, behind the trend are older millennials, particularly those without college degrees, who are living at home in unprecedented numbers.
Now, it remains true that the youngest adults are still the most likely to live with their parents. Half of them do, according to Pew, up from 46 percent a decade ago. But Pew also found that 25 percent of people ages 25 to 29 live with a parent, up from 18 percent a decade ago, and 13 percent of people ages 30 to 34, up from 9 percent.
The living arrangements reflect not only the growing trend of delaying marriage but also larger economic factors that are keeping these millennials at home.
Pew's Richard Fry argues that a challenging job market, particularly for young men, is a major factor driving the trend. The Bureau of Labor Statistics reports that 5.7 percent of men ages 25 to 34 are unemployed, a full percentage point lower than older men. Fry's analysis of census data shows that 36 percent of older millennials without jobs live with their parents, compared with 18 percent of employed men.
Education is also a big part of the story. Fry's analysis shows that just 15 percent of older millennial men with a college degree live with their parents, compared to 26 percent with only a high school degree.
Poor job prospects may be making young men less desirable for marriage, Fry says, since most women look for men with a steady job. But older millennial women are also living at home in bigger numbers. Overall, a $17,000 earnings gap between college educated and high school educated adults age 25 to 32.
The high cost of housing may play an additional role. With homeownership rates of those under 35 at a 20-year low, many more may be looking to rent. But as rents rise faster than wages, the rental housing market may also be keeping millennials from moving out of their parent’s homes.
A recent study by Zillow found a small correlation between rent costs in 2016 and the percent of 24- to 34-year-olds living with their parents in 2014. The study also found that the percentage of older millennials living at home increased in each of the metropolitan areas from 2005 to 2014. Indeed, in the past two years that data has been available, 19 percent of 25- to 34-year-olds in metropolitan areas have been living at home, the largest rates since 1940.
These trends could have larger implications for future economic growth and financial stability, as housing represents over 60 percent of assets held by the middle class and roughly 15 percent of gross domestic product.
Since the share of 25- to 34-year-olds living with a parent has been steadily rising since reaching its lowest point 45 years ago, it may be years until we experience the full significance of these new living arrangements. With its potential impact on the economy, though, it’s a trend we may not be able to ignore.