US: Young adults living at parents' home ...a form of helicopter parenting

[rcjordan]

Debbie: Some/much? of this trend is just an extension of helicopter parenting. We don't want to see them suffer a much-reduced lifestyle.

"Nearly half of young adults in the US are living at home with their parents, and all that saved rent is fueling a luxury boom."

"Living at home is freeing up their budget and leaving them with more disposable income for spending."

https://www.businessinsider.com/young-adults-living-home-luxury-boom-usa-morgan-stanley-2022-12

[buckworks]

>> all that saved rent

When our boys lived with us as adults we charged them rent.

We were happy to have them around but they were expected to contribute to the costs of the household.

[rcjordan]

>we charged them rent.

My daughter charges rent to her adult daughter.  But the rent is based on a decade-old mortgage and probably far below current market rates.

>happy to have them around

While I enjoy the kids/grandkids for short visits, I don't want them around for long.  I truly enjoy the big, empty nest.  (I think it is a primordial male response. hhh)   Louise, otoh, would have them all --all 20+ of them-- move back in a heartbeat.

[buckworks]

>> probably far below current market rates

Our rent likely was, too. But it meant they weren't just freeloaders.

They all moved out in due time and have pretty good values about paying their own way and not expecting subsidies.

[DrCool]

In my circles I don't really see too many single young adults living with their parents but I do see a lot of young married couples with their first kid that are living with the parents. The single people can pile 4 or 5 people in a house and split the expenses but the young couples don't have the money to get a place of their own, especially if the wife wants to stay home with the kids.

[littleman]

Neither of my 20 somethings live with me, but I can see it happening.  When entry-level jobs are paying $50k, a home cost $1.5 million plus and rents can be $2k+ a month (for a room) it makes little sense for them to live on their own instead of saving money.  Two friends of mine lived with their parents and in-laws for years while saving up for a modest home.

[ergophobe]

When entry-level jobs are paying $50k, a home cost $1.5 million plus

Recently, as my 93yo dad was getting upset about something about young people, I asked him how much he made in his first teaching job. "$5000 plus $600 for coaching football," he said proudly, highlighting how little he made and how hard it was back then. Then I asked him how much he paid for his first house (which he lived in with a wife and four children). He said it was $13000.

I pointed out that back when "we had nothing" a starting teacher fresh out of college could buy a house for 2.3X annual salary. That very house is $396,000 on Zillow. Divided by 2.3, that would give a starting teacher salary of $172,000. And that doesn't count that the family that buys that house will also have medical costs way out of line with what they did back then, will likely bring tens of thousands of dollars in student loans to the table, and will be expected to try to put money into a 401K and a 529 fund, neither of which existed back in the 1950s. So I would say to have the life my father did, a starting teacher would need a salary over $200,000.

We have seen the largest transfer of wealth from the young to the old in human history. Wages stopped tracking productivity in the 1970s, which has worked against young people. We have built a lavish welfare state for older people (and I look forward to soon enjoying that) with Social Security and Medicare, we have rigged the tax system for older people with the mortgage tax deduction and the lower tax rate on capital gains.

I could go on, but we older people and the generation before us have really shafted them in every imaginable way. I tend to cut the kids a lot of slack. Granted, I don't have kids so I'm not faced with having them want to live with me until 30. And at a certain point, charging rent is probably the way to go.

Then there's the fact that the idea that kids should move out of the family house at a certain age is a historical aberration that less than a century or too old. But I think it was expected that the kids would contribute economically to the household and I think that's a reasonable ask.

Then... there's the personal story. I was really struggling with depression, with what to do with my life that would earn money. I was really at a low point at 23 when my dad said, "Look, why don't you just live here. It won't cost you anything. Find one thing you wished you had studied in college and take a course. Don't think about where it will lead, just find something that's interesting. And keep trying new things. If you don't like something, quit and try something new. Eventually you'll find something you like or you'll be old enough for Social Security. Either way, problem solved."

Those last two sentences crack me up in retrospect. But the short version is that with financial pressure off, I was able to start saving some money even with my shitty minimum-wage job. With that money, I took two courses in history and took a three-week trip to rock climb in France, exactly the types of "entitled" activities people often criticize among young adults living with their parents. By 25, I was back on my feet mentally, on my way to grad school and a PhD in history using my French I first started learning while on my entitled youth rock climbing trip. And, of course, that was my career full-time for 24 years and even this morning I taught a class in sixteenth-century French paleography, 36 years after that conversation with my dad.

Those extra years of rent-free living gave me an incredible leg up when I really needed it. Thanks dad.

[littleman]

>Thanks dad.

That's a pretty nice story.  I feel like it is almost a moral obligation to help the generation coming up under us.   The flip side of owning a modest home in the bay area is the incredible amount of equity we've accumulated.  I would not be apposed to relocating to a sideways purchase in another state and using the difference to help my four children buy their first homes.  The problem with that plan is that everyone seems to want to stay local.

[ergophobe]

>>moral obligation

The challenge I think is how to transfer money, whether to your kids in particular or just to the next generation in general (in my case as I have no kids), while not putting your old age in jeopardy.

It occurs to me that with people living so long, we should develop a custom of having inheritance skip a generation. My father will not leave me anything close to a life-changing amount of money, but it might be life-changing for his grandchildren at the stage they are at. My grandmother left me $25,000 which was enough to zero out my student loans, which was life changing at that age. Now $25K would be nice, but it wouldn't really change much for me.

[littleman]

Those are good points.  There is a fairly large chance that if someone lives in the US that a good amount of their accumulated potential inheritance will end up being sucked up by medical bills which will ultimately push the wealth mostly back to the still living older generations in the form of dividends.   

[ergophobe]

By the way, if I recall, the average age of first marriage among males in Renaissance Florence was 26, meaning that for a significant percentage the age approached 30. Until that time, the "men" lived with their parents. The main driver was that it was hard for them to become self-supporting earlier. After the Black Death the age dropped because inheritance was focused on fewer people.

The age at first marriage for women was less elastic, bouncing between 19 in good economic times and 21 when things were tight.

For the young men, this was a bit of a problem as they had few outlets and this led to a lot of violence in general and rape in particular, which is one of the reasons that brothels were supported. Much later, in Geneva that I study, brothels were suppressed by the Reformation, but "youth" violence, meaning men in their 20s, was common. The big problem was that these unmarried men in their 20s living with their parents, often among the wealthiest citizens (wealth and street violence tended to be positively correlated not negatively correlated at the time), just didn't have that much to do, so gambling fights and drunken brawls and random violence against immigrants (yup, le plus ça change...) were favorite pastimes.

All of which could, of course, be taken to argue the point either way (i.e. it's good or it's bad to have adult children living with the parents), but it is not unique in history. It has ever been the case when the economy is tight and the barriers to starting an independent household are high. That was very much the case in the time and place I study - one third of the housing in the city was razed in the space of a couple years in order to improve the defenses and the number of residents increased 2.5X (from 10,000 to 25,000) in the space of about 20 years. So it was very hard for a young person to afford to leave the parental house and start their own household. Thus they stayed with their parents, delayed marriage, and engaged in all manner of unsavory behaviors.