Why Are Half Of All 25-Year-Olds Living With Their Parents? The Federal Reserve Answers

Tyler Durden's picture

Back in 1999, a quarter of all 25-year-olds lived with their parents. By 2013 this number has doubled, and currently half of young adults live in their parents home.

While the troubling implications for the economy from this startling increase are self-evident, and have been extensively discussed both here and elsewhere (and are among the key factors pushing both the US and global economy into secular stagnation), a just as important question is why are increasingly more young adults still living at home.


While we admit there is something morbidly grotesque in none other than the Fed taking an active interest in this most devastating development (for the simple reason that it has been the Fed's own policies that have unleashed not only the $1.3 trillion wave of student debt but an army of Millennials in their parents' basement), it is the Fed itself that has been the latest to attempt an answer.

Here is the Fed's response to "Why Are More Young Adults Still Living at Home?"

Economist Maria Canon and Regional Economist Charles Gascon noted that many factors have been suggested for why young adults return to or continue living at home, including significant student debt, weak job prospects and an uncertain housing market. The table below breaks down the percentage of 25-year-olds who were living at home for the period 2012-2013 in each state in the Federal Reserve’s Eighth District as well as in the country as a whole.

Labor Market and Higher Education

One potential reason for the increase in young adults living with their parents is the labor market. The authors highlighted research showing that individuals at the beginning of their careers often need more time to transition into the labor market. This is reflected in the unemployment rates of those between 21 and 27, which are often higher than for other age groups.

Earning a college degree can help with labor market outcomes, as young adults with a college degree are more likely to live independently. However, additional research has shown that the underemployment rate for recent graduates was about 40 percent during the Great Recession. Canon and Gascon noted: “An implication is that a significant portion of recent graduates were earning lower wages than what they should have been, given their education.

Also affecting many young adults is that they started their post-education careers during a recession. Canon and Gascon discussed a study noting that those entering the job market during a recession pay a price for about a decade. They wrote: “That’s because they start work for lower-paying employers and slowly work their way up toward better-paying jobs.”

Housing Market

The nation’s recovery may also play a role in young adults remaining at home. As the economy has grown, so have house prices. Canon and Gascon pointed out that national house prices have increased 21 percent since 2012, and rental prices have grown even faster in many areas. They wrote: “Because most youth would be first-time homebuyers, they have no housing equity to regain from the rebound in house prices after the housing crash.”

In the Eighth District, housing generally remains more affordable. The authors noted that the median house costs 3.3 times the median household income nationally, but less than 3 times the median household income in most District states.

Student Debt

According to a 2014 survey, more than half of first-time homebuyers said student loan debt was delaying saving for a down payment for a house. A 2015 report from the Federal Reserve Bank of New York found that a $10,000 increase in a student’s average debt increases the probability of living with parents or other family members by the age of 25 by about 2 percentage points.

* * *

To all the 25-year olds out there reading this from their parents' basement, all we can add is that these are actually all correct. There is just one thing left to add: for all of the above you can thank, who else, the Fed for blowing the biggest debt-funded asset bubble in history.

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MFL8240's picture

Here is the answer:  The federal Reserve stole the countries money and transferred it to their Wall Street Friends.  The Givermnet allowed the Corporations to disolve their work force and move planst to China, all of the items sold in AMERICA ARE FIRIGN.  tHAT IS WHY KIDS HAVE NO FUTURE AND UNTIL WE GET RID IOF THIS GROUP OF UNELECTED CLOES NOTHIN G WUILL IMPROVE,

Shocker's picture

Student Loans, Economy, Job market are all good answers

Layoff / Closing List: http://www.dailyjobcuts.com


Captain Debtcrash's picture
Captain Debtcrash (not verified) Shocker Oct 27, 2015 2:59 PM

Education prices is not what should be concerning millennials, its asset prices.  Education prices are just another inflated misallocation of resouces caught up in this credit created boom that is sure to fail.

bania's picture

My parents didn't let me have sex in the house. I was gone when i was 18.

Boris Alatovkrap's picture

Maybe you parent apartment is not have balcony...?

Occident Mortal's picture

The thing about education is it's the one thing nobody can ever strip you of.


Every other investment you make can be stolen or nationalised. But they can't take your education from you.

Boris Alatovkrap's picture

You are not so familiar with methodology of Khmer Rouge. If you have something, state can taking away. All thing is possible at barrel of gun*

* Statist is eventually prefer Kalishnikov, cannot even tabulate global death by Kalishnikov automatic rifle.

mrdenis's picture

Don't look back to the good old days, look forward to the bad new ones.........

CheapBastard's picture

"There's never been a better time then now to go deep in debt for nothing."

cheka's picture

tariff every import no matter who makes it

nyc/dc has traded tens of thousands of manufacturing jobs for a handful of bankster jobs

that's what the 'US' gets in these free trade deals - nyc gets more access to foreign markets

chunga's picture

I doubt any kids of these fed banker pigs live in their basements.


Supernova Born's picture

Strip any saved wealth from the US born middle class with insane college costs and then import H-1B's from foreign lands to take the jobs.

The business model of the US (serial exploitation of successive waves of desperate immigrants) almost got fucked up there post WW-II with an ever more educated and powerful middle class.


nufio's picture

why does the author assume that college education automatically makes graduates deserving of higher salaries. Has he not seen the graduation statistics for the US.

70% are in fields that have zero demand in the labor market. For all the talk of H1Bs. they mostly work in high tech. the US graduates <50K CS graduates every year. of 1.5 million!! H1B has practically zero impact on 95% of the college graduates life. It does have an impact on programmers who specialized in COBOL and refused to adapt to the changing tech field. 

disclaimer: i am on H1B at the moment, but have worked outside US for the past 4 years. moved back because canada is blowing even bigger asset bubbles than the bay area.

SafelyGraze's picture

I agreek wifh IVRYTHNG taht MFL8240 sayd.

if that is your REALNAMME!


Retired Guy's picture

Jonhny won't leave home because it is so comfortable.

The author left out that video games, social media and so much else is available and are more fun than reality. When I left home at 16(1965)  there was nothing there but a mother that pissed me off. TV was crap. Rentalble movies didn't exist. Work, education, family and investing were my main entertainments. Now there are so many other ways to spend one's time.



Son of Loki's picture


<tariff every import no matter who makes it>

also 25% tax all foreign bought houses and commerical RE at the time of purchase and a higher rate thereafter.


How about our gubmint helping its citizens out for a change instead of destroying Americas middle class?

Majestic12's picture

"Why Are Half Of All 25-Year-Olds Living With Their Parents?"

Note this "half" number is in the states with few job opportunities, except menial labor....duh.

This generational war shit is another "keep the 99% distracted" bullshit tool that has been around the block...

"People try to put us d-down
(Talkin' 'bout my generation)
Just because we get around
(Talkin' 'bout my generation)
Things they do look awful c-c-cold
(Talkin' 'bout my generation)
I hope I die before I get old
(Talkin' 'bout my generation)

My generation
This is my generation, baby

Why don't you all f-fade away
(Talkin' 'bout my generation)
Don't try to dig what we all s-s-say
(Talkin' 'bout my generation)
I'm not trying to cause a big s-s-sensation
(Talkin' 'bout my generation)
I'm just talkin' 'bout my g-g-generation
(Talkin' 'bout my generation)

My generation
This is my generation, baby

Why don't you all f-fade away
(Talkin' 'bout my generation)
And don't try to d-dig what we all s-s-say
(Talkin' 'bout my generation)
I'm not trying to cause a b-big s-s-sensation
(Talkin' 'bout my generation)
I'm just talkin' 'bout my g-g-generation
(Talkin' 'bout my generation)

My generation
This is my generation, baby
My, my, my, my generation
My, my, my, my generation

People try to put us d-down
(Talkin' 'bout my generation)
Just because we g-g-get around
(Talkin' 'bout my generation)
Things they do look awful c-c-cold
(Talkin' 'bout my generation)
Yeah, I hope I die before I get old
(Talkin' 'bout my generation)

My generation
This is my generation, baby
My, my, my, my generation
My, my, my, my generation

Talkin' 'bout my generation
(My generation)
Talkin' 'bout my generation
(My generation)
Talkin' 'bout my generation
(Is my generation baby)
Talkin' 'bout my generation
(This is my generation)

Talkin' 'bout my generation
(This is my generation)
Talkin' 'bout my generation
(This is my generation)
Talkin' 'bout my generation
(This is my generation)
Talkin' 'bout my generation
(This is my generation)"

My tight ass rocked in wide-striped bell bottoms!

detached.amusement's picture

H1Bs no effect, try telling that to any number of my unemployed friends in the computer field.  big corporations hire almost nothing BUT h1b people.


to do grunt work, anyway.  those with the real tech skills are those of us that have been in for quite a while and have some vague notion of job security simply due to the amount of knowledge and troubleshooting skills.  the H1Bs I work with in application support areas are such a joke its not even funny.


 nothing personal, but fuck H1B visas and anyone that supports them.

TheReplacement's picture


One thinks a purported Russian is know this.

puckles's picture

Indeed, Boris.  But even without an actual gun, the State is increasingly capable of robbing you of an education whilst seemingly providing you with one; e.g., the proliferation of for profit educational entities, enabled by the State, as well as the complete takeover of the traditional university curriculum by cultural Marxists, also enabled by the State, via various unending and rapidly multiplying regulatory requirements, aimed at satisfying "diversity".  It is a true struggle these days to acheive a real education in such an "academic" environment.  Just try to get a grant on a topic not sanctioned by the powers that be...Getting grants is a difficult enough process to begin with, but when political effect is added, even in scientific areas, it becomes truly impossible; so everyone learns to adapt, very quickly.

Billy Sol Estes's picture

The only Gay in Russia is the GPU

jeff montanye's picture

that's a lot of down votes for a not bad pun (even if dated, but hey billie sol, though he died only a couple of years ago, was born in 1925).  


geno-econ's picture

In Russia is okay for man to kiss man but with tongue is a nyet nyet.

PresidentCamacho's picture

Everything I ever need to know I got for free from ZH, and that they can take away from me if the market keeps going up forever.



Education and apprenticeship was outlawed about 40 years ago. 

Now all you got is fake diplomas for fake make work jobs that don't exist - after the prerequisite 10 years of post secondary school indoctrination.  

mkkby's picture

Whole families may be pooling walmart part time salaries to keep afloat.

Some millenials at home may be supporting mom, day, grampa and grandma.  Remember they lost their retirements twice in a decade, and now the house is worth less than they paid.  The new normal is back to the future, where extended families stayed together.

Fuck the fed and their phoney money, which has turned everything into a ponzi scan.

Vinz Klortho's picture

They can make it worthless though, by shipping jobs overseas and
allowing excessive immigration into the US for jobs where they want to keep the
salaries low for strategic reasons.


jeff montanye's picture

even if the strategy is they are cheapass motherfuckers.

AGuy's picture

"The thing about education is it's the one thing nobody can ever strip you of."

Depends. It could be a worthless degree or an education in a obsolete technology that no one uses anymore.

insanelysane's picture

Or you could become a surgeon and then the goverment can implement price controls so you can't make money doing your trade.

Cloud9.5's picture

9 mm to the brain will do it in an instant.

robobbob's picture

boris had a good point there. intellectuals and educators not deemed sufficiently enthusiastic about the new regimes policies are some of the first to get taken out. in the west, for the time being, that is only employment wise, elsewhere, very literally

technical advancement demands staying on the treadmill, or face getting pitched out of the way

all-priced-in's picture

My mon (RIP) use to say that all the time -


From as far back as I can recall - get an education - it is the only thing THEY can't take away from you.


I always wished I would have ask her who is "they"?


Maybe you can answer it for me -


Who is they?




Fukushima Fricassee's picture
Fukushima Fricassee (not verified) all-priced-in Oct 27, 2015 5:34 PM

FEMA is They NSA is they EPA is they the three branches of government is they.

Herd Redirection Committee's picture

'They' are a group that uses other groups as front groups.

That is why they are called they.  Because THEY know who THEY are working with/for, but the rest of us are called 'conspiracy theorists' for implying, for connecting the dots, for questioning, for doing research. 

acetinker's picture

Two things:

1) Education is VERY different from indoctrination.

2) They is actually us.

Not necessarily you and not necessarily me, but us just the same.

TheBigComic's picture

I can tell you who or what they are, finding and naming them is another thing. The blue print is in my comic: https://www.youtube.com/watch?v=E92bTK7JgrE

You have to watch it all the way through (4 minutes).

claytonmoore50's picture

"The thing about education is it's the one thing nobody can ever strip you of"

What a load of baloney!

If it is a non productive 'asset' you should dispose of it.

The thing about student loans is that it is almost impossible to discharge the debt, it will follow you to the grave.

If your education is not producing income for you it was not worth the cost.

You would have been better off taking free classes online and persuing studies on your own at little or no cost if all you want is 'education'.


Student Loans - What a scam!

Meat Hammer's picture

The thing about knowledge of the truth is it's the one thing nobody can ever strip you of.

You were close, OM.

divingengineer's picture

Knowledge makes a man unfit to be a slave


oooBooo's picture

Yeah, they just sell a lot of people fraudulent educations.

slimycorporatedickhead's picture

People talk about "post secondary education" as if its an actual accomplishment. Anyone whos done it knows it is a COMPLETE JOKE. I learn more from a couple hours of zero hedge and youtube than a whole semester of senior finance or economics. Waste of time, waste of money, what happens when this entire generation realizes they got SCAMMED?

80 years are up's picture

You seem to be of the misguided belief that higher education is actually teaching students something.  It is teaching them how to get a free apartment and free food for 4 to 6 or more years.

McCormick No. 9's picture

They might not be able to take education away from you, but they sure as hell can try to make sure you never get one- all for 30 G's a year.


-An alum of Autodidact U.

57-71's picture

You don't get education from an institution with a piece of paper to prove attendance.

U4 eee aaa's picture

Clearly you've never seen anyone who had a baseball bat applied firmly to the noggin. They can take anything they want from you up to and including your life