For many families, the traditional path was simple: graduate, get a job and move out of your parents’ house. But rising living costs are changing that picture, with more young adults continuing to live at home or moving back in with their parents.
The trend raises a question many parents eventually face: When does helping an adult child become too much help? For young adults, staying home can make financial sense. Housing costs can be difficult to manage, while starting salaries may not stretch far enough to cover rent, mortgages and other expenses. Living with parents can provide an opportunity to save money and get financially established.
On the Roggin Report, the discussion focused on the difference between using that time to get ahead and simply allowing someone else to pay the bills. Katrina Doyle pointed to the cost-of-living pressures facing younger adults. “I know I’ve struggled financially myself,” Doyle said, adding that people within 10 to 15 years of her age are struggling to pay rent, mortgages and other expenses.
Nick Collins took a different view, calling the situation a possible “failure to launch.” But he also acknowledged that moving back home can make financial sense if an adult child has a plan and is actively working toward independence. “If you got a plan, that’s what I’m saying,” Collins said. “Do they have a plan and they’re knocking it out to get to whatever level they want to?”
Fred Roggin also shared a personal perspective, describing a recent period when one of his adult children and his girlfriend stayed at the family home for about two and a half months during a transition. While there were moments when they drove his wife crazy, Roggin said she ultimately loved having them around. Doyle also pointed to the idea of family as a village, saying moving back home can work when the adult child contributes and helps the family in return.
The common thread in the discussion was having a plan. Living with parents can provide financial breathing room, but the goal for many families is eventually getting back out independently.
For decades, the housing market served as America’s economic bellwether—a leading indicator that signaled where the broader economy was headed and a powerful engine of growth. But since 2022, housing has undergone a quiet demotion. It has consistently dragged on gross domestic product growth, and it no longer meaningfully moves the dial on an economic cycle now dominated by an AI buildout and high-end consumer.
The conventional explanation is straightforward: Stuck supply and interest rates have kept affordability weak and prices elevated, pricing out buyers and dampening demand. But there’s another factor at play—a demographic wildcard that deserves closer attention. Millions of priced out young adults, who have weathered a surprisingly tough entry-level job market, are stuck living at home with their parents.
To assess this tailwind, RBC tapped the U.S. Census Bureau’s American Community Survey to estimate how much additional housing demand could come from young adults living with their parents as they move out and form independent households. The analysis identifies three key points: A normalization in the living-at-home rate could unlock roughly 675,000 units of incremental housing demand—meaningful—but not a silver bullet for this cycle. Demand is positioned to flow into the rental market disproportionately, good news for a rental market sitting at 7.3% vacancy rate. Affordability and labor conditions, not demographic shifts like delayed marriage, are limiting household formation.
Housing remains in a deep freeze due to affordability constraints. Emerging household formation is disproportionately likely to flow into rental housing unless financing conditions change, according to the analysis. RBC estimates about 22% of young adults (aged 25-35) reported living with a parent, grandparent, or parent-in-law in 2025 (the group is referred to collectively as LWP). This share is below the pre-pandemic peak of nearly 24% but is still slightly above that of the past five years, and notably above the early 2000s.
A 22% share of young adults living with parents represents roughly 10 million people who could buy or rent a new home. If the entry level labor market normalizes enough to pull that share down by just 2 percentage points, RBC estimates roughly 675,000 units of incremental housing demand. Applying each group’s observed preferences from the ACS implies an overall 66/34 rent-to-own split in this additional demand—more renter heavy than recent aggregate household growth. Owner-occupied households accounted for roughly 63% of annual net new households (867,000 new owner households versus 497,000 new renter ones) on average in the past four quarters.
Critically, the rental market can absorb this demand. Elevated multifamily completions from the 2021-2022 construction boom pushed vacancy rates to 7.3%—the highest since 2019—and rent growth has decelerated from its peak in 2023. RBC places more weight on the aggregate affordability and labor market story as an indicator for housing demand, and expects the homeownership rate for young adults will remain near current levels as renter-occupied households outpace owner-occupied formation in the near term, because of affordability hurdles.
The breakdown of the living-at-home rate reveals that affordability and labor conditions—not shifting demographics—are the dominant drivers of household formation among 25-35-year-olds. RBC analyzed the data by subgroups: People with disabilities, recently divorced, enrolled in school, never married and not in the labor force, never married and unemployed, and never married and employed.
To understand what could motivate young adults to form households, RBC decomposed the movements of the living-at-home rate into composition versus propensity. Put simply, composition asks whether more young adults belong to groups that tend to live at home, while propensity asks whether each group has become more likely to stay, regardless of how large it is. Propensity increases across all subgroups contributed 71% of the total weakness between 2006-2019, amounting to roughly 3.5 times the compositional contributions, and more than the entire net improvement from 2019-2024.
Given that the increases in propensity are broad based and not selective, factors like affordability and financing can be seen as the dominant drivers. Shifting lifestyles also don’t appear to be strongly responsible for changing household formation trends. For example, unmarried employed adults are typically about five times as likely as married adults to live with their parents, and unmarried unemployed adults are typically around eight times as likely. That means a population shifting away from marriage will mechanically obtain a higher living-with-parents rate, bringing down demand for housing.
Recently, delayed marriage has been the most prominent compositional story in this group. Unmarried employed adults grew from about 25% to 38% of the 25-35-year-old population between 2006 and 2024, making them the largest single group. Meanwhile, the married share fell from 44% to less than 35%. Shifts do amplify the influence of a group’s likelihood of living at home. But, while these compositional changes are notable and contribute to the direction, RBC finds that the reshuffling of the population is a more modest contributor to household formation. Never married employed adults are now the largest share of young adults.
