Millennials, amiright? While there are many names for those born between 1980 and the mid 2000s (Generation Y, the Internet Generation, and the Peter Pan Generation, to name a few), there’s little agreement regarding whether or not the generation’s high levels of education, nontraditional lifestyles, and perhaps unrealistic expectations lend toward a future of remarkable achievement or ultimate failure. Skeptics of millennials fear the latter and point to the high numbers of young adults living at home as symptomatic of a doomed generation.
Dubbed the Boomerang Generation (in reference to those adults who leave home, then come back), young adults are returning to the nest in higher numbers than previous generations. Yet their temporary return home shouldn’t be seen as failure to survive in the real world, but rather an understandable effect of an economic landscape largely out of their control. Alternatively, it’s the motivation to do well and eventually fulfill the American dream that drives young people to return home and save money.
All in all, the fears that millennials are destined to live with their parents in a quasi-adulthood forever are unfounded—millennials aren’t doomed, they’re planning their futures. But that doesn’t mean they don’t have their work cut out for them.
What’s the Deal?
Millennials are the generation of young adults raised with the Internet, who were babysat by Nickelodeon and only vaguely remember the floppy disk. Though highly educated and technology-savvy, these young adults are returning home in higher numbers than previous generations. In 2013, according to statistics by Pew, 36 percent of millennials lived at home with their parent(s). Of those living at home, one third to one half are college students (although this number is debatable); men are more likely to move back home than women; and millennials younger than 24 are much more likely to live at home than those older than 25. The trend is widespread: Some 70 percent of young adults living with their parents know a friend or family member who also moved back home.
The more alarming statistic is the 29 percent of millennials between the ages of 25 and 34 who “boomeranged” back to their parent’s home after living on their own. The trend to return home isn’t just an American phenomenon: European countries have also seen a rise in young adults returning to the nest. The return to the childhood home is partly an effect of demographic changes (millennials are getting married later and attending school longer). But arguably, the single largest factor motivating the return home is economics, not sociocultural characteristics.
It’s the Economy, Stupid
Millennials were one of the hardest-hit demographics during and following the 2008 American recession. Young adults whose parents were negatively affected by the recession experienced the most backlash: Those millennials whose households lost the most net worth in 2009 averaged about $300 in annual savings, while their more affluent counterparts averaged $3,000 in savings in the same period. Additionally, a college degree promises less security than it once did: Even college graduates from poor families have an increased likelihood of living in poverty than peers from affluent families. And with the class of 2012 carrying an average of $29,000 in debt, it’s easy to see how millennials have a difficult time building wealth.
A major difference between millennials and their parents is the prosperity that greeted the older generation upon their graduation. Current rent for 18- to 24- year-olds takes a notably larger portion of pre-tax income (32.1 percent) than when their parents were young in 1980 (26 percent). Meanwhile, since 1983, the average net worth of adults between 29 and 37 years old has fallen by 21 percent. In 2012, only 63 percent of millennials had a job (down seven percent from 2007). Unemployed millennials are more likely to live with their parents than their employed peers (45 percent versus 29 percent), but even those lucky enough to be employed face a changing and difficult job market. Employment benefits, basic medical coverage, prescription drug benefits, and retirement and compensation packages have decreased in the years following the recession.
A general feeling of economic melancholy—the idea that children will not be more or even as successful as their parents—seems pervasive in discussions about the future of millennials. But despite the downcast reports and the bleak economic trends, millennials are decidedly resilient. The boomerang home proves that millennials are coping with the insecure economic landscape by doing something that makes perfect sense: saving.
Why It Matters
Never before have so many young adults lived at home, and the return of children to the nest has many concerned about the future of millennials. The return home seems contradictory to the American dream, which is built on the precept that young adults leave home to establish their own households and become more successful than their parents.
According to one report, 70 percent of Americans feel that too many adult children are living at home with their parents, while 57 percent feel that boomerang kids prevent their parents from moving on with their lives. But claims that millennials return because they are unable to cope with the real world and doomed to live within the safety of their home forever fail to consider the unique environment in which millennials are transitioning into adulthood.
falseRegardless of what older adults think, millennials are actually pretty optimistic about their future. Eighty-three percent of those who live at home (or moved back temporarily) say they will have enough money in the future to live the kind of life they want. Meanwhile, 80 percent of parents believe it’s okay for adult children to live at home if they’re saving money. Millennials living at home feel relatively fulfilled: 68 percent are satisfied with their housing situation, and 34 percent believe it has improved their relationship with their parents. (Their parents tend to agree.)
The decision to return home doesn’t make millennials doomed, just different. A slow economic environment, increased debt, and less financial stability drive millennials home more than any inability to cope with the real world. The concept of complete financial independence following college is slowly changing, and millennials are the new experiment in emerging adulthood and the longer transition to leaving the nest.