Living With Parents Could Cost You More Than You Think

Young (and not-so-young) adults hoping to save money by moving back into their childhood bedrooms, take notice: There’s a decent chance you could find yourself on the hook for housing expenses anyway, new research shows. More worrying: It could constrain your ability to save for retirement.

A new study from the Employee Benefit Research Institute, or EBRI, found that about one-third of adults living with one or both parents are solely responsible for housing expenses, suggesting that assumptions about the economic benefits of multigenerational households may be overly optimistic. Children of aging baby boomers who are unexpectedly burdened with their parents' mortgages, utilities and other housing costs could find their own long-term financial security at risk.

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How did we get here?

The percentage of young adults living with one or both parents has ticked down modestly from a peak of roughly 1 in 5 in 2017 but remains elevated by historical norms. Last year, 16% of 25- to 34-year-olds lived with their parents, according to the Census Bureau, compared to 8% in 1970.

“The main benefit for a young adult living with their parents is being able to save on expenses and to either pay down their debt or increase their savings,” says Joanne Hsu, a research associate professor at the University of Michigan and co-author of a Federal Reserve study on “boomerang” kids (that is, young adults who move back in with parents after a period of living independently).

A 2019 Federal Reserve analysis found that young adults would spend an additional $13,000 a year on housing, food and other expenses if they lived on their own. About half of that was for higher housing and utility costs; the remainder was for items ranging from food to furniture.

Since then, homeowners' costs have jumped by 25%, and renters' costs have risen by a whopping 38%, according to Harvard University's Joint Center for Housing Studies. The median monthly costs paid by homeowners in 2024 topped $2,000, and median monthly rent was nearly $1,500.

'Sandwich generation' faces a squeeze

Unsurprisingly, this financial pressure has created a dynamic where generations doubling up under one roof isn't just a young-adult phenomenon: EBRI analyzed census data from 2020 through 2022 and found that more than 1 in 10 adults between the ages of 25 and 65 lived with one or both parents at some point between 2020 and 2022. Half were older than 35, and one-third had children of their own.

But the ostensibly more budget-friendly option of cohabitating can carry hidden costs. This is especially true for second-generation adults who have aged out of young adulthood, a significant number of whom are paying to keep that roof over their parents' heads, rather than the other way around.

The EBRI study showed that, among adults living with their parents, those responsible for paying for housing tended to skew older. About a third of those living with parents and paying housing expenses were 45 years or older; roughly 1 in 10 were 55 or older.

The research found that adults living with their parents had similar or higher amounts of debt, and living with parents didn't give them an edge when it came to paying down those balances: Nearly a third of workers added to their debt between 2020 and 2022, regardless of their living situation.

Although the people who live with their parents and pay for housing have annual incomes of about $10,000 higher at the median than those who live at home and aren't responsible for expenses like mortgage and utility payments, that isn't enough to bridge the gap.

"One thing people don't think about is the aspect of caregiving and providing care for two generations — parents and child," says Samita Thephasit, research associate at EBRI and author of the study.

These Americans face a daunting combination of supporting aging parents, saving for their retirement themselves and, for many, supporting children of their own at the same time. “That's something that really highlights how much the sandwich generation is being squeezed,” the University of Michigan's Hsu says.

Being prepared to potentially inherit a parent’s housing expenses is a possibility more working adults today should have on their radar, Thephasit says. “I think for a lot of people who weren't anticipating to be caring for their parents, it could be a financial setback," she warns.

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