Young Adults Living With Parents: The Silent Economic Drain in 2025

Move over, avocado toast—the real economic culprit might be your childhood bedroom.

Boomerang Economics

Forget the traditional markers of adulthood. A generation is rewriting the rulebook, trading mortgages for mom's cooking and rent checks for family Wi-Fi. This isn't just a lifestyle shift; it's a seismic tremor under the foundations of consumer spending, housing markets, and long-term wealth creation.

The Domino Effect

Every young adult opting out of the rental market is a direct hit to property investors and local economies. Discretionary spending—the kind that fuels new businesses and innovation—gets funneled into savings or student debt instead of experiences and goods. The downstream effect? Stagnant demand in sectors from home furnishings to automotive, creating a feedback loop that keeps the broader economy in low gear. It's a masterclass in unintended consequences, orchestrated by student loans and housing costs that have laughably outpaced wages.

Future-Proof or Financially Stunted?

Proponents call it savvy—a strategic retreat to build a war chest. Critics see a generation delaying the financial rites of passage that drive economic churn. This mass cohabitation cuts the traditional consumer lifecycle off at the knees, bypassing the spending spikes that come with first apartments, new furniture, and starter homes. The system was built on predictable cycles of formation and spending. That engine is now sputtering.

The result? An economy running on fumes, waiting for a generation to finally move out and start buying lawnmowers they'll never use—just like their parents did. After all, what's a healthy economy without a little performative consumer debt?

Key Takeaways

• A growing share of young adults are staying in their parents’ homes, which could be due to financial reasons.
• As more young adults live at home, this trend could weigh on consumer spending as those who live at home may spend less compared to those who don't.

In the past, life for a young adult might have followed a familiar trajectory to that of one's parents: go to college (or don't), MOVE out, get a job, marry, and purchase a home.

However, some young Americans haven't moved out of mom and dad's house just yet.

In 2005, 11% of 25 to 34 year olds reported living with parents, but by 2023, 16% were, according to Census research.

So what's keeping more young adults at home?

Researchers speculate that this cohort could be opting to live at home for financial reasons.

Why This Matters

Young adults who don't strike out on their own simply don't spend as much as their counterparts who do fly the nest. Research indicates that has a real impact on the larger economy.

The cost of both renting and homeownership have increased dramatically over the past few years, and younger generations are more likely to have student loan debt than older ones.

This issue could worsen in the NEAR future, too, as some recent college graduates have struggled to find jobs. For college graduates aged 22 to 27, the unemployment rate is 4.8% compared to 4% for all workers, according to data from the Federal Reserve Bank of New York.

And more young people living at home could have negative downstream effects for the economy more broadly.

Related Education

When young adults live at home, they may spend less compared with to their peers who moved out. Since consumer spending is a large share of GDP, an increasing proportion of young adults living at home could be a drag on GDP growth.

"The rising share of young adults living at home may, therefore, have depressed overall consumer spending by $12 to $13 billion, or about 0.1% of total consumption," states a report from Oxford Economics. "A worse perception of labor market conditions, which for young adults are the key determinants of financial well-being, is making them more pessimistic and may make them more cautious when it comes to spending."