Key insights
- Rising living costs are forcing young adults to move back home, straining their parents' finances. High housing costs and job market challenges are key drivers. This trend may reduce discretionary spending and delay household formation, potentially weighing on economic growth and housing demand. The impact on equities is slightly negative due to reduced consumer spending and potential for increased financial strain on households.
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Economic pressures are pushing more young adults to move back home, and it's affecting their parents' finances.
In a recent survey from Thrivent, a financial advice firm, nearly half of parents with a child ages 18 to 35 said their child moved back home at some point. This trend, also called "boomerang living," has continued amid economic uncertainty over the past several years.
"Adult children moving back in with their parents has shifted from stigma to strategy—for both parents and kids," said Gene Elder, a financial consultant at Thrivent, in a press release.
Generation X, generally the parents of Gen Z, has borne the brunt of financial pressures, with many supporting both their children and parents at the same time. This generation is approaching retirement, but many will not have enough saved to support themselves when they stop working.
The pressures are familiar. Inflation reached 3.3% in March, as oil-supply disruptions from the Iran war pushed energy costs sharply higher. Hiring has stalled, too, particularly for recent college graduates.
The Thrivent survey of more than 2,300 adults, fielded in late March and early April, found 55% of young adults who returned home said the move was financially necessary. Another 27% said it wasn't necessary but offered financial benefits.
Housing being unaffordable was the reason cited by 45%, while 36% pointed to job loss or reduced income.
The rise in housing prices has moderated from its pandemic-era surge, but affordability is still a national issue. A 2025 Oxford Economics report found that a household needed an annual income of $110,100 just to afford a single-family home.
In 2025, it took the average homebuyer seven years to save enough for a down payment, according to Realtor.com. In the Thrivent survey, 34% said saving for a down payment was their primary reason for moving home.
These stays often last a year or more, and the financial weight is landing on parents.
More than half (55%) of parents said they expect the arrangement to last at least a year, and 47% say their own finances have already been hit.
Almost one in five parents said they would cut their savings or retirement contributions, and 43% would cut personal spending to support their child.
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