From the Fed — 49% of Young Adults Still Living at Home

Federal Reserve’s Report on the economic well-being of U.S. households finds a whole lot of young adults are still living at home. The Survey of Household Economics and Decisionmaking (SHED) shows 49% of people aged 18 to 29 live with their parents.

Another 47% of adults in the same age group are getting financial assistance to pay one expense or another. This would be smartphone bills, rent or general living expenses, etc.

Laura Ullrich is the director of economics at Indeed Hiring Lab. She has studied the issue for years.

“You’ve got to think about this as a Venn diagram,” Ullrich said. “Forty-nine percent of them are living at home. 47% of them are getting help from someone outside their household, which doesn’t include those living at home. There’s a lot of adult children getting financial support from their parents.”

The SHED report bothers Ullrich who once worked as a senior regional economist for the Federal Reserve Bank of Richmond.

“When household formation slows, it slows new household formation, which also makes the age where people typically get married go up, the age people have their first child goes up, fertility rates go down,” Ullrich noted. “People buy fewer houses. It impacts local schools. It’s silly to think about if you’re not an economist, but it has much more far-reaching economic implications than just thinking, oh, there’s just a bunch of adults living at home.”

Another issue is the difficulty young people have landing a first job.

“Given what you see written about housing affordability and current inflation rates, but also the difficulty young adults are having in finding a first job, it’s not surprising to see that number go up,” she said.

The report has more bad news. Another 26% of adults aged 30 to 44 are receiving financial help from outside their household

“It’s not just these much younger adults,” she said. “That percentage is creeping upwards, even over what we think of as the average just-out-of-college fresh adult.”

Source link: Fortune — https://bit.ly/4wOgy0V