Living With Family is a Stepping Stone to Homeownership

More and more young adults are moving back in with family members after college. The assumption is that this is an economic necessity, as those saddled with debt are unable to buy a home. However, even if this is true at the time, it turns out it could be more temporary than expected. Many are transitioning directly into homeownership right after their stay, rather than having a period of renting as most people do.

About half of those living with parents or other family members are paying rent, but it’s likely less than actual market value, though this hasn’t been confirmed. The other half are staying rent free. In both cases, their expenses are much lower than if they were attempting to live on their own. That could be because they can’t afford it otherwise, but it’s also possible they would be able to afford getting their own place, but saving money helps them pay down debt or save up for a down payment. Of course, the vast majority of people — 73% — are still renters before they are buyers, but the percentage who lived with parents, relatives, or friends before buying their first home has increased from 12% to 21% over the past three decades.

Photo by Amirr Zolfaqari on Unsplash