BAM Key Details:

  • NAR reported a decline in the share of young adults aged 25 to 34 living with family members to save money—from 17.8% in 2020 to 15.6% in 2022. 
  • Living with family members, due to the flexibility of remote work and the high cost of housing, allowed many to pay off debt and save toward a down payment. 

Millennials and Gen Z who live with their parents still get flack for it, regardless of their reasons. But with the high cost of housing, many of those who moved back in with their parents—or who never left—may have set themselves up for a stronger financial future. 

According to the latest NAR research, young adults are on the move now. And living with family members had benefits for many, allowing them to pay off debt and save more of their income. 

While low inventory still keeps some in waiting mode, more adults aged 25 to 34 are leaving their family basements to buy homes of their own.

In 2020, the percentage of adults aged 25 to 34 living with family grew to 17.8%, the highest rate ever recorded since 1960. In 2022, that rate dropped to 15.6%. 

For context, fewer than 10% of adults aged 25 to 34 lived with family between 1960 and 1980. 


Source: NAR

Reasons for living with family

During the pandemic, some young adults may have moved home because the flexibility of remote work trends made it possible for them to do so, allowing them to avoid high rental costs

Others may live at home due to a recent job loss or to save money while obtaining a higher education degree. 

Regardless of their reasons, it’s not hard to imagine how this could benefit potential first-time home buyers

For many of these young adults, living with family may have allowed them to save more of their income toward a down payment on a home. Even those who pay rent to live with their parents generally pay less than they would for a rental of their own. 

For many college graduates with massive amounts of student debt, living with their parents is the only way to afford a roof over their heads. 

According to NAR research, 6% of student debt holders living at home reported that the pandemic allowed them to pay off student debt more quickly or get closer to paying it off precisely because they moved in with their parents and saved a considerable amount on rent.

For some, that advantage allowed them to save for a down payment on a home. 

For indebted graduates with small children, the cost of childcare makes it all the more necessary to save money where they can. So, when living with family is an option, it’s hard to pass up. 

For those who turn this situation into a financial advantage by paying down debt, improving their credit score and debt-to-income ratio, and saving money toward a home purchase, living at home is a temporary situation that sets them up for a better financial future. 

First-time home buyers are most likely to rent before buying a home

As of February 2023, the share of home buyers that rented before buying a home remains the majority at 64%. What’s new is the rising share of those moving directly from a family member’s home to a home of their own; that figure grew from 21% in 2021 to 27% in 2022. 

Since 2016, the share of home buyers moving directly from a family member’s home to a home they purchased has grown well past the 12% to 15% registered between 1989 and 1995, when NAR first started tracking the data. 


Source: NAR

About half are paying rent to family

Roughly half of the first-time home buyers who lived at home before buying made rent payments to family. NAR doesn’t track whether or not these rent payments approximate fair market value rent, and for some, these payments are meant to cover their share of utilities, groceries, and other benefits of living there (possibly including childcare). 

What they do track is the household composition of those who live with family. By those numbers, it’s more common for single women and married couples to live with family before buying a home of their own. 


Source: NAR

Not ideal, but potentially beneficial

While living with parents may not be an ideal long-term situation for many young adults and their families, if prospective first-time home buyers can move home (or stay put) before becoming homeowners, it could help them save more toward a down payment. 

The more they can save, the more likely they’ll be able to buy down the mortgage rate, making their monthly housing payments more affordable. 

Living with family also gives these buyers more time to navigate a housing market with a limited supply of affordable housing inventory. National housing supply in December 2022 stood at just 2.9 months. And 57% of homes in the U.S. are selling in less than a month. 

Would-be home buyers living with family have the flexibility to wait for an affordable home that better fits their needs. 

Growing back-to-the-office trend might require these adults to move out sooner

Beneficial as this arrangement can be for many, as more businesses require employees to return to the office at least part-time, living with family may become less common as more of these adults are faced with the need to live closer to their employers. 

That said, it’ll be interesting to see how the cost of housing impacts employers’ decisions to require employees to return to the office, as some young adults are already choosing to change jobs rather than give up their living situation. 

According to the 2021 State of Remote Work Report from Owl Labs, 90% of the 2,050 full-time remote workers surveyed believed they were just as productive or more productive working from home compared to when they worked in the office. 

Another 74% said working from home is better for their mental health, and 84% said continuing to work from home after the pandemic would make them happier, with many of these respondents even willing to take a pay cut. 

A January 2022 report from Ergotron, surveying 1,000 full-time workers, corroborates the Owl Labs study, confirming the benefits of remote work for the overall well-being of their employees. 

Like it or not, remote work is part of the new post-pandemic normal for many. It’s hard to go back to the office after experiencing the life-changing benefits of working from home. 

One of those benefits, for many, is the ability to finally become a homeowner. 

Top takeaways for real estate agents

As even small changes can make homeownership more (or less) affordable to young adults in your area, be aware of every change in the market that could impact their ability to buy a home.

And be prepared to share the data, including any helpful graphics that help them see the bigger picture surrounding the most recent changes in mortgage rates, home prices, and inventory. 

Be the agent who keeps them informed and helps them navigate the housing market with confidence.