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More Millennials Living At Home Than Ever Before

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The numbers are in and the boomerang effect is real.

More young adults are living at home than five years ago, despite the economic recovery , according to a new report by Pew Research Center that crunched U.S. Census bureau data from 2010 to 2015.

“The surprise is here we all thought the job market mattered but five years in, there seems to be other factors [effecting household creation],” says Richard Fry, Senior Researcher at Pew Research Center. As national unemployment rate for millennials declined to 7.7 percent from 12.4 percent in 2010, Fry found it surprising that more young adults were living with parents now than in 2010.

Some experts believe that although the labor market is rebounding, other factors are making it harder for young people to live independently.

Young people have more debt, a higher cost of living and stagnant relative wages ,” says Luke Delorme, Research Fellow at the American Institute for Economic Research. The economist points out that student loan debt grew from $509 billion at the beginning of 2006 to about $1,360 billion by the beginning of 2015, a number that represents an increase of 167 percent.

Fry, who conducted this study, agrees that higher cost of living and increasing student debt are factors that could contribute to the lack of household creation. But he thinks an attitudinal change could be at play as well.

“My suspicion is that I think there has been a change in attitude both on the part of parents of young adults as well as the young adults themselves about this living arrangements,” he says, careful to point out that he has not done any attitudinal research on this topic and it is purely “conjecture.”

While Fry would not comment if he thinks this suspected attitudinal change is due to the impact of coming of age during the Great Recession , he thinks that this statistic will have a huge impact on the economy.

“There has been no growth in young adult households,” Fry said, explaining that there were 25 million young adult households in 2010 and that there are 25 million young adult households now.

“It doesn't matter if you are renting or owning but when you go out and put yourself in your own dwelling,” he says that there is a lot of spending, from a cable subscription to cleaning supplies.

Continuing, he adds, “This is why there is so much attention being paid to the living arrangements of young adults because as far as the standpoint of the housing industry and landlords and realtors, this is what we are waiting to see.”

“We need more young adult households in order to provide a lift to the nation's housing market. That is what we have been waiting for five years and still hasn’t materialized,” says Fry.

However, if you have big goals like paying down student loans or saving for a first house, living at home can be a good personal finance tactic to achieve those dreams.

“I think it’s probably wise for young people with mounting debt to live at home so that they have a chance to become net savers and give them a chance at a secure financial future,” says Delorme.

Holly Johnson, blogger behind frugal living site Club Thrifty,  lived with her parents in her early twenties, while her boyfriend turned fiancée attended an out-of-state degree program.

“I lived at my parents, paid down the loan on my car, and saved for our wedding so we could pay for the bulk of it with cash. Being able to live with them during that time was huge for us and really helped us start off our real ‘adult’ lives on solid financial footing,” says Johnson, who believes that the key to living at home harmoniously is to have financial goals.

If you're living at home with your parents as an adult, you should have a plan or a goal you're trying to achieve ,” says Johnson. “There's a big difference between living with your parents and taking it easy because it's free and really utilizing that time to get ahead in life.”

Alexandra Talty is a freelance journalist living in Southampton, New York.  After leaving New York City in 2013, she used her personal finance (and journalism) skills to travel the world, before settling back where it all started: her hometown. The founding Editor-in-Chief of StepFeed, her work has appeared in Techonomy, Publisher's Weekly and The Southampton Press, among others. She is also on Twitter.