Gen Z adults moving in with parents due to high housing costs

Rising housing costs mean a growing number of adults are heading back home to mom and dad after graduation from college, causing financial stress across generations, a new survey says. 

Approximately 46% of parents said they had "boomerang" adult-age children who had returned home to live with them at some point, according to research from financial services firm Thrivent. Half of that share attributed the trend to the surging costs of homes and rent, with that particular sentiment increasing by 15 percentage points from just a year earlier.

"This is a wakeup call that's gone unanswered," said Chaz Black, Thrivent financial advisor, in a press release. "More young adults returning home underscores the enormous – and growing – financial pressures they're facing after graduation."

The data indicates that the pressure is also rippling across to their parents. As children moved back in, 38% of their parents said they were struggling to pay off their own debts, with the share increasing from 23% a year ago. Close to 37% found it difficult to save for their long-term housing and retirement goals; the sentiment more than doubled from 16% in 2023. Thrivent conducted its recent poll in April, surveying over 2,200 people. 

A previous study from Redfin earlier this year similarly illustrated the impact of current home affordability on both younger generations and their reliance on family in a challenging housing market. In that study, the brokerage found a rapidly growing number of Generation Z and millennial consumers receiving down payment assistance or other forms of support from their parents. 

While the pace of home price growth moderated over the past year, affordability has not improved as interest rates accelerated to decades-long highs, and put a purchase out of reach for aspiring owners. Payments on a median-priced home made up over 32% of the average national monthly income in the first quarter this year, a level several percentage points above what would be considered affordable, according to Attom 

But it's not housing costs alone making homeownership elusive for young people, Thrivent's poll said. Student debt is limiting their ability to save, with approximately 28% of young adults with education loans indicating they're living paycheck to paycheck. Only 22% said their first job adequately helped them pay down their debt.

Their outlook is causing anxiety among parents about their children's future financial wellness. Among parents with young adults at home, less than half expressed confidence their kids were ready for financial independence. A 55% share gave their child a "C" grade or lower on financial readiness, while 11% assigned an "F."