Millennials, Gen X, and boomer family members are cohabitating more than ever — and it's helping with their finances
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- The share of people in the US living in multigenerational households has gone up compared to decades prior.
- Money is the biggest reason to live in a multigenerational household, a Pew survey found.
- Millennials, especially, are reaping the financial benefits of living with their parents.
More Americans are living in multigenerational households than they have in decades — and it's all about the money, especially for millennials.
That's according to a recent report from the Pew Research Center, based on results from an October 2021 survey with 1,548 adults in the US who are at least 25 and who reside with "a parent or grandparent or who live with an adult child or grandchild age 25 or older" as well as an analysis of data from the Census Bureau's Current Population Survey Annual Social and Economic Supplement.
In the survey, 67% reported "financial issues" as either a major or minor reason they live in a multigenerational household. Forty percent noted this as a major reason.
"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," the authors of the Pew Research Center report wrote.
Although finances and money issues seem to play a big role, other top reasons include "this is just the arrangement they've always had" and "to care for an adult family member or to receive care." Forty-six percent reported "this is just the arrangement they've always had" as a major or minor reason, and 45% said "to care for an adult family member or to receive care" as a major or a minor reason.
"The question asked broadly about financial issues, which could mean different things for different respondents," Juliana Horowitz, associate director of research at Pew Research Center and one of the authors of the report, told Insider. "For some it could be about not having enough money to live on their own, or needing to pay down debt, or any other issue related to their finances."
For many young adults, living with parents or grandparents can be a financial lifesaver. And millenials need it — some think they will never be able to have what they want in life due to their financial circumstances. A higher share of people in this generation has more credit card debt compared to their savings than other generations, is burdened by a student loan crisis, and their finances were also hard hit by the pandemic. Despite these financial woes, people ages 25 to 39 years old — mainly millennials — who are residing with their parents are reaping the perks of being in a multigenerational household, based on the Pew report.
The US is seeing more multigenerational homes than it has in decades
According to Pew Research Center's analysis of the Current Population Survey Annual Social and Economic Supplement, the share of people living in multigenerational households climbed from 7% in 1971 to 18% decades later in 2021.
And young adults in particular are contributing to this rising share.
"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," the authors wrote.
Horowitz said caregiving could be "an important factor" for lower-income adults, based on the survey results. She told Insider that "it's possible that those with upper incomes may be able to maybe pay for care or do some sort of other arrangement that allows them to have the care they need without a family member living with them."
"While financial issues are widely cited as a reason for living in a multigenerational household, adults with lower incomes are particularly likely to say this type of living arrangement is helpful to them financially," the authors wrote. Twenty-nine percent of lower-income US adult respondents living in multigenerational households said this has helped them a lot with their own finances.
For some, the pandemic has aggravated their financial circumstances. A February survey of 3,800 US adults from the National Women's Law Center found women were more likely than men to say their family's financial situation was worse now than before the pandemic. A January 2021 survey from Pew Research Center found a higher share of lower-income respondents than middle- or upper-income respondents reported their and their family's financial situation is worse relative to a year earlier.
Millennials, especially, are reaping the financial benefits of living with their parents
Just 16% of parents who live with an adult child reported in the October Pew survey that it has helped with their own financial situation a lot, less than the 30% of adults who live with a parent who reported this.
Living in a multigenerational household may be a good financial and housing choice during a competitive housing market, high rents, and with the median listing price in the US at an all-time high. Survey respondents ages 25 to 39 living with a parent had a higher share saying they don't pay rent or mortgage at all — 37% — compared to respondents who are at least 40 years old — 23%.
"In the majority of households with an adult child living with a parent, the adult child is the one living in the parent's home," Horowitz said. "And this is particularly the case for younger adults who are living with a parent."
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