Photographer: Michael Okoniewski/Bloomberg

The Simple Reason Millennials Aren't Moving Out Of Their Parents' Homes: They're Crushed By Debt

The share of young men and women living with their parents rose to a record last year

Millennials are not budging from their parents' basements, even though the job market is on the mend. One really big reason? Student loans. 

Last year, the rate of 25- to 34-year-olds living at home rose to 17.7 percent among men and 11.7 percent for women, Census data showed last week. That is a record high for both genders.

Rising co-residence rates are correlated more closely with student debt than with factors like economic conditions and the housing market, according to a staff report in November from the Federal Reserve Bank of New York. The regional bank wrote about the trend today in its blog called "Liberty Street Economics."

"State-cohort groups who were more heavily reliant on student debt while in school are significantly and substantially more likely to move home to parents when living independently, and are significantly and substantially less likely to move away from parents when living at home," the report said. 

The increasing rate of parental co-residence among 25 year olds from 2002-03 to 2012-13
The increasing rate of parental co-residence among 25 year olds from 2002-03 to 2012-13
Source: Federal Reserve Bank of New York

To make things even worse, a super-hot housing market is making it too expensive for even gainfully employed millennials to get their own place. 

"Strengthening youth labor markets support moves away from home, but rising local house prices send independent youth back to parents," the report said. 

Source: Federal Reserve Bank of New York

The economy may be improving, but sorry, Mom and Dad: the "boomerang" phenomenon is here to stay. 

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