At least so far, they are not forming independent households, which means they are not purchasing homes as early as they might have. One of the basic ideas in wealth gaining is the longer you hold it, the more you gain. —Richard Fry
STANSBURY PARK, Utah — Karlin Moody is 19 and still lives at home. She has a job as a pharmacy technician and commutes to classes at Salt Lake Community College. At night, she comes home and eats dinner with her family.
She doesn't think of it as mooching, she said. She buys her own groceries and pays for her car and gas. She's supporting herself while making sound financial decisions.
"I think mainly — and I like living at home, I love my family — but financially, it's nice to save money by not putting it into an apartment," Moody said.
More than a third of her Millennial demographic — ages 18-31 — also live at home with their parents, according to a Pew Research Center analysis released this week. Many of them aren't "mooching," as Moody would define it. A third to half of those living at home are also college students.
With about 36 percent of Millennials living at home, more young adults lived with their parents in 2012 than at any time in the previous four decades. That also represents the largest share of young adults in any single category of living arrangement today — those in the next largest group, representing 27 percent of Millennials, live with unrelated roommates or a cohabitating romantic partner. About 23 percent are married, and just 7 percent live alone.
Many of those figures have remained remarkably consistent since before the Great Recession. Just 8 percent of young adults lived alone in 1981, for example. About 31 percent of young adults lived with their parents that same year, but the biggest difference was the number of young adults living with a partner or roommate. In 1981, that group represented just 14 percent of young adults. The number of married couples has declined from 43 percent, nearly half of young adults, in 1981.
No recovery for Millennials
The state of the economy continues to impact young adults and is one of the biggest factors behind Millennials' choice to return home, said the report's author, Richard Fry. Even though the recession officially ended in 2009, young adults continue to struggle financially.
Much of it may be related to unemployment. Though 70 percent of young adults were employed in 2007, just 63 percent had jobs in 2012.
While unemployment is a concern, Fry said that as an economist he was especially concerned about the number of young adults who were consequently unable to form independent households. Those who do become independent and begin purchasing homes early are usually more able to build wealth for retirement, he said.
"At least so far, they are not forming independent households, which means they are not purchasing homes as early as they might have," Fry said. "One of the basic ideas in wealth gaining is the longer you hold it, the more you gain."
Delaying home ownership and other investments makes it much more difficult to build a nest egg, and buying a home is one of the primary ways middle class Americans can build wealth, he said.
Education, less debt
Another peculiarity of Millennials' financial behavior, Fry said, is that they shy away from taking out debt. So far they have proven far less likely to take on debt for cars, credit cards, even homes than previous generations. Students loans are the exception to that rule.
Many families, like the Moodys, have found a college education is more affordable without paying room and board for two. Karlin Moody's decision to live at home ultimately boiled down to a financial decision, she said. It was simply easier to pay for college if she commuted.
"I feel like it's a better way (for them to transition into adulthood)" Tressa Moody, Karlin's mother, said. "It makes it easier on them. And she helps us out in many ways — we don't take care of her every need."
That, Karlin Moody said, was a key difference between what she was doing — living at home so she could afford to pay tuition — and young adults she would regard as "mooching" off their parents.
"If you don't have a job or you're blowing all your money on unneeded things, that's mooching," she said.
College, like unemployment, is another important factor behind the increase, Fry said. College students could represent as much as half of the group of Millennials living at home, and only 18 percent of young adults with a bachelor's degree lived at home. Furthermore, the Pew study counted college students living in dorms as living with their parents because these students are often financially dependent on their parents and often return home during the summer.
Delayed marriage, delayed independence
The third major factor behind the increase, Fry said, is the decreasing number of young adults who marry.
It could also explain a number of other behaviors the study observed, including the increased popularity of living with roommates or cohabitating, and the discrepancy between boys and girls living at home.
According to the Pew study, men represented the majority of Millennials living with their parents. This is probably because women tend to marry or cohabitate at an earlier age than men, Fry said.
Separate studies put the median age for marriage at 26.6 for women, and 28.6 for men. The gap persists for cohabitating couples as well — the median age for cohabitation is 21.8 among women and 23.5 for men.
Couples that marry or cohabitate were far less likely to live with their parents, Fry said. Less than 3 percent of young married couples move in with their parents, and cohabitating couples are even less likely to live at home.
However, the gender gap may also be partially explained by differences in education. Men generally take longer to finish college, though Fry said the reason for that trend is not entirely clear.