I don’t think it’s a coincidence that Austin has a far lower share of its young adults living with their parents than many other cities do. Just 6% of working adults in the Austin metro area live with their parents, one analysis found, versus nearly 14% in Greater San Antonio and 20% in Greater Los Angeles.
The pros and cons of living with the ’rents
One obvious advantage of living with parents is that they tend to charge below-market rents, or nothing at all. That makes it easier to save for a deposit on a house, helping young adults get on the property ladder sooner than they would otherwise. Indeed, homeownership rates among those 25 to 34 have risen slightly since 2016.
There are also potential disadvantages, however, particularly when it comes to socializing. Living at home with parents can make it much more challenging to meet new people. This, in turn, could partly help explain why Americans are getting married and having children later in life. These delays might not seem important, but they can leave people feeling like they’re behind in life, which can affect their health and well-being.
I also wonder whether living with parents is indirectly making young adults unhappier at work. That’s because older adults often live far from the urban centers where young people are most likely to find jobs directly related to their degrees. Job satisfaction rates are substantially lower among 18- to 29-year-olds than among the rest of the working population.
A problem for the entire US
The housing shortage isn’t just an issue for young adults. A recent analysis I found insightful was headlined “The housing theory of everything.” It argued that the issue helps explain at least part of the current malaise in the U.S. economy.
For example, when people can’t live and work where they want, they’re unable to use their talents fully. That contributes to the relatively slow productivity growth the U.S. has experienced in recent years.
Similarly, if people can’t live in areas where they might meet and work with like-minded individuals, they have fewer opportunities to share ideas, which can hinder innovation.
And if the housing shortage is indeed encouraging young adults to delay having children, it could make it harder for the U.S. to fund Social Security and other government programs in the future.
Making it easier to build new homes in places people want to live and work could go a long way to easing these problems. It’s possible high rents translate into high barriers to adulthood, too.
