High home prices, rising living costs, college debt, and other prohibitive financial factors are making it tougher for young adults to move into their own place. As a result, younger millennials and Gen Z are living with their parents longer than other generations. The latest census data shows that over 50% of men and women aged 18 to 24 live with their parents, while among those aged 25 to 34, 18.7% of men and 12.9% of women live with their parents.
When the youngest Gen X was 25 years old in 2005, the share of young adults living with their parents was just 13.5% for men and 8.1% for women. But even older millennials were leaving their parent’s houses earlier than current generations. In 2013, when the oldest millennials were 32, 16.8% of men and 11.1% of women lived with their parents—a nearly 2% decrease compared to 2023.
This shift in living arrangements has contributed to the median age of first-time homebuyers reaching an all-time high of 38 in 2024, as reported by the National Association of Realtors.
Although many factors are causing young adults to delay homeownership, what role have rising rents played? Renting is often the first step toward homeownership, yet when this becomes unaffordable, transitioning to homeownership down the line becomes an even greater challenge. To explore this, we analyzed rent as a percentage of income in the 25 metros identified by Apartment List as having the highest share of 25-35-year-olds living with their parents, examining how the financial burden of renting has changed from 2017 to 2023.
Can Young People Afford to Move Into One-Bedroom Apartments?
If rents rise faster than incomes, renters have to allocate a larger portion of their budget toward housing. This limits one’s ability to pay for necessary expenses, like food and transportation, and can also set back efforts to save for a down payment. A common financial guideline recommends not spending more than 30% of income on housing.
Fortunately, in 13 out of 25 cities analyzed, rent as a percentage of income did not increase from 2017 to 2023. This suggests that, despite rising median rent prices, rent became more affordable for individuals earning the average annual income. Notably, Austin, Denver, and Seattle—cities with lower shares of young adults living with their parents—are among those where rent as a percentage of income decreased.
From 2017 to 2023, the percentage of income spent on rent decreased in some of the country’s most expensive real estate markets including Los Angeles (-2.3%), New York (-1.2%), and San Francisco (-7%).
However, in several cities rent as a percentage of income exceeds or nears 30%, meaning those earning less than the average annual income will struggle to afford rent. In high-priced cities like New York and San Francisco, where 28% of income is spent on housing, those earning less will exceed the 30% threshold to afford monthly rent.
In Los Angeles and San Diego, renters earning the average income already have to spend over 30% of their monthly income on rent, limiting their financial freedom. This could contribute to why 26% of 25-35-year-olds live with their parents in Los Angeles. Similarly, in Riverside, rent as a percentage of income rose from 23.8% in 2017 to 27.2% in 2023, likely contributing to the 30% of 25-35-year-olds living with their parents.
Rent as a percentage of income increased the most in Phoenix, by 4%, followed by Riverside with a 3.4% increase, and Tampa and Orlando, both with an increase of 2.9%. In all four of these cities, at least 15% of young adults live with their parents.
And while rent as a percentage of income has become more affordable for some, this doesn’t necessarily translate into more young people attaining homeownership. Mortgage payments have far surpassed income growth, requiring a larger share of a person’s monthly income each year. This may keep young people as renters for much longer as they struggle to cover their necessary expenses on top of saving for increasingly expensive down payments. From Q3 2023 to Q4 2024, the latest data available, the homeownership rate for those aged 25 to 29 fell by 2.6%, and for those aged 30 to 34, the rate fell by 1%.
Two-Bedroom Rent Burden: A Barrier to Saving for Many Young Adults
In eight cities, rent as a percentage of income exceeds 30% for two-bedroom apartment rentals, giving young people little opportunity to move up into bigger spaces. The most expensive cities to rent a two-bedroom apartment on an average annual salary are Los Angeles (38.4%), San Diego (36.8%), and Miami (35.3%).
For young people with college debt or additional monthly expenses like car payments, the high price of rent in these cities makes it nearly impossible to save anything extra each month.
Only those earning a higher salary would be able to comfortably afford two-bedroom rents in cities like New York, San Francisco, and Orlando, where rent as a percentage of income exceeds 30%.
Nationally, the median two-bedroom rent increased from $1,059 in 2017 to $1,375 in 2023, pushing the rent as a percentage of income up slightly from 25.1% to 25.2%. In comparison, one-bedroom apartments account for just 22.4% of the average renter's income nationwide.
How Shifting Living Arrangements Impact the Housing Market
Not only are an increasing number of young people living with their parents, but they are also more likely to live alone. Economically, this puts single people at a financial disadvantage. With only one income, single people typically have less buying power than a couple or partnership, which may also lead to a delay in homeownership.
For instance, a consumer expenditures report from the U.S. Bureau of Labor Statistics shows that a married couple spends 31.2% of their expenditures on housing, while a single person spends 36.3%.
In 24 out of 25 cities analyzed, the share of young adults (aged 18 to 34) living alone increased from 2015 to 2023. Notably, many of the most affordable cities for renters experienced the largest jumps in young people living alone. In Austin, where one-bedroom rent was $1,366 in 2023, the share of young people living alone increased by six percentage points. Minneapolis, St. Louis, and Philadelphia each saw a four-percentage-point increase in the number of young people living alone, with one-bedroom rentals priced under $1,300.
Meanwhile, in Los Angeles and San Diego, where one-bedroom rents are around $1,900, the share of young adults living alone only increased by two percent and one percent, respectively.
This shift in living arrangements is impacting the housing market. In 2017, 18% of buyers were single females and seven percent were single males, but in 2024, the National Association of Realtors reported that single females represented 20% of buyers and single men represented eight percent.
But this growing demographic of buyers likely have a higher salary than the average young adult. In the same NAR report, the median household income of first-time home buyers was reported to be $97,000, which is far above the average annual salary in most cities. For many, particularly solo buyers, breaking into the housing market remains a challenge, making it understandable why so many young adults continue to live with their parents as they work toward financial independence.
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Methodology:
Average monthly income was calculated by dividing the annual average income for all occupations by 12, based on data from the U.S. Bureau of Labor Statistics. Rent prices for one-bedroom and two-bedroom apartments were sourced from Apartment List, covering data from January 2017 to January 2023.
Information on the share of young adults living alone was obtained from Apartment List and the U.S. Census Bureau, using the report "Living Arrangements of Adults 18 Years and Over in the United States" (American Community Survey, ACS 1-Year Estimates Detailed Tables, Table B09021).
