Parents Increasingly Move Back In With Their Kids, What’s Going On?

Authored by Mike Shedlock via MishTalk.com,

Multigeneration households are on the rise. Let’s discuss several reasons why…

Pew discusses the Demographics of Multigenerational Households.

The number of Americans who live in multigenerational family households is about four times larger than it was in the 1970s, while the number in other types of homes grew by far less. The share of the U.S. population living in multigenerational homes more than doubled over the past five decades.

After declining in earlier decades, multigenerational living has grown steadily in the U.S. since the 1970s. From 1971 to 2021, the number of people living in multigenerational households quadrupled, while the number in other types of living situations is less than double what it was. The share of the U.S. population in multigenerational homes has more than doubled, from 7% in 1971 to 18% in 2021.

Multigenerational living is growing in part because groups that account for most recent overall population growth in the U.S., including foreign-born, Asian2, Black and Hispanic Americans, are more likely to live with multiple generations under one roof. Thus, the rise in the multigenerational family household population is linked to the changing makeup of the overall U.S. population. However, multigenerational living also is rising among non-Hispanic White Americans, who accounted for a higher share of the multigenerational household population growth from 2000 to 2021 (28%) than of total population growth (9%).

Among major racial and ethnic groups, Americans who are Asian, Black or Hispanic are more likely than those who are White to live in a multigenerational family household.

About a quarter of Asian (24%), Black (26%) and Hispanic (26%) Americans lived in multigenerational households in 2021, compared with 13% of those who are White. 

Since 2000, the multigenerational household population has grown by 22.1 million people, but some groups played a larger role than others in driving that change. Americans younger than 40 accounted for almost half (49%) of the increase in the multigenerational household population but only 17% of overall population growth. In general, young adults are marrying later and staying in school longer than previous generations, which may contribute to their rising inclination to live with other family members under one roof.

Finances the Top Reason

PEW discusses the reasons in a separate article, Experiences of Adults in Multigenerational Households. 

There are a variety of reasons why adults live in multigenerational households, but financial considerations top the list. Many also say that this is just the arrangement they’ve always had or that caring for an adult family member or receiving care is a reason for their living arrangement. Relatively few say the reasons they live in a multigenerational household are related to the COVID-19 pandemic. 

For the most part, adults living in multigenerational households say this has been a positive experience, with at least half saying their arrangement is often convenient and rewarding. Still, about a quarter say living with other adult family members can be stressful all or most of the time, and this is particularly the case among adult children living with a parent.

The experiences of adults in multigenerational households often vary by income; and, among adult children living with a parent, by age. For example, those with lower incomes are more likely than those with middle and upper incomes to say there’s not enough space to live comfortably. Younger adults (ages 25 to 39) who are living with a parent are much more likely than those ages 40 and older to see financial benefits in the arrangement and much less likely to say they contribute anything toward the mortgage or rent in their household.

Financial Stress and Demographics

Unsurprisingly, finances are a factor in 67 percent of these decisions. It’s a major factor in 40 percent of these arrangements. 

There are more households over time so the number of multigenerational households will also increase over time even if the percentages stay the same. 

However, PEW notes that non-Hispanic White Americans accounted for a higher share of the multigenerational household population growth from 2000 to 2021 (28%) than of total population growth (9%).

Judging from the cost of food and rent, it’s easy to understand the financial stress.

CPI Month-Over-Month Shelter 

CPI Data from BLS, chart by Mish

Shelter is nearly a third of the CPI. For discussion, please see CPI Accelerates 0.5 Percent in January, Up 6.4 Percent From a Year Ago.

How the Fed Messes With People’s Lives From a Mortgage Rate Perspective

For those looking to buy a home, prices are out of sight. Prices have barely started to decline but mortgage rates have more than doubled. 

Please see How the Fed Messes With People’s Lives From a Mortgage Rate Perspective for discussion.

Fifty Percent Say They Are Worse Off Than a Year Ago

Finally, Gallup reports Fifty Percent Say They Are Worse Off Than a Year Ago

Among lower-income workers, a massive 61 percent say they are worse off now than a year ago. 

Financial stress is on the rise.

Both PEW articles are about a year old. 

With rent and food prices soaring, and with mortgage rates making homes the most unaffordable in decades, I am sure PEW’s numbers are understated, perhaps by a lot.

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