Before the pandemic changed our way of life, kids can’t wait to grow up. They wish to move out of their parent’s house and build their own nest the soonest time possible. Rarely will you find capable young adults not wanting to leave their childhood home. Many would find jobs early on in an attempt to live an independent life. But then, the pandemic happened.
How the Covid-19 Crisis Forced Young Adults to Return to Mom and Dad’s
Many young adults are jobless after the pandemic forced their companies to shut down. Even if some businesses are starting to resume their operations, not everyone made the cut. Many among younger generations, namely and millennials and Gen Z, are left without a choice but to decide to move back with their parents. They are having difficulties finding a job that pays well and can help pay for their sky-high rent and student loans. It does not help with their confidence knowing some people would think of them as still dependent on their parents for having to move back the nest.
According to statistics, about 2.2 million Americans decided to return to their parent’s house after news of the pandemic. Some decided to spend more time with family while others say it is due to financial reasons. Since most of their parents live in spacious, mansion-like houses, it only makes sense for their kids to move back and try to save some money.
The two generations that still in the age of buying their first homes are struggling to save enough down payment. This is one of the reasons why they are still renting. Depending on where they live, the rent can cost more than what they can comfortably afford.
The Good and the Bad of Moving Back to Your Parents
Young generations who decided to move back to their nest can experience perks and drawbacks. One advantage of moving back home is that you and your parents get to save money. This is especially true once you start sharing with their home expenses which can be a lot less expensive than living on your own.
Your parents may not even oblige you to pay rent and will share everything from their food to their internet and cable. You get to save as much of your income and start saving for the down payment of your future home. If luck is really on your side, you can get approved for an FHA multifamily loan, occupy one unit and start earning money by becoming a landlord.
One might be able to pay off their student debts with the savings they can get with moving back to their parents. You might even be healthier with all the home-cooked meals mom and dad can make for you. You also get the chance to reconnect with your loved ones and spend quality time with your aging parents who barely see you ever since you moved out.
But like all good things, there can be drawbacks if you return home. For one, you might not enjoy as much privacy with your parents and possibly siblings living under the same roof. You might not like their rules and personality differences can lead to huge fights.
They might also question your every move and every decision, which may not be healthy for your mental health. Moving back home can also restrict your job options if you are looking for a job. Even with the prevalence of employers looking for remote workers, some would still prioritize those living within the city.
Will Moving Back in Hurt Your Chances of Becoming a Homeowner?
Some say living back with your parents doesn’t help much in putting young generations into a better financial situation. Not all who don’t share in their parent’s expenses are serious about saving for a house. With the student loan and credit card debts under your name, it can be hard to prioritize a home down payment than paying off these debts.
Experts also say that moving back to your parents’ home and delaying homeownership can hurt your finances. According to a study, those who bought their house before 25 years old were able to build more equity compared to those who bought their homes at a later age. They also enjoy the best returns on their home investment for making an early home purchase.
Since home equity can be a substantial source of wealth, millennials and Gen Zs would be better off buying their homes at the earliest date possible. But with the economic recession, one can only hope they can quickly earn more and start saving enough down payment to access homeownership.
Some kids had no choice but to return to their old homes due to financial reasons. This greatly affects the real estate market, considering fewer people are buying houses. But then, the pandemic sealed the fate for some millennials and Gen Zers, forcing them to leave their rentals and go home to parents.