Living at home in your mom’s basement just received a major upgrade. Almost half of the young adults in the United States live at home, fueling a luxury boom. Here’s what financial analysts recently estimated.
More and more young adults are choosing to live at home with their parents. According to Business Insider, data from the US Census Bureau shows that almost half of young Americans, including young adults between the ages of 18 and 29, live with their parents. In fact, analysts from Morgan Stanley estimated that the percentage is 48%, which is nearly half of the population. The last time percentages reached these heights of young adults living at home was seen in the 1940s, during the Great Depression era. While there are various reasons why young adults are staying at home longer, from saving money to not being able to afford current rent prices, it is causing a significant boom in the luxury market.
Without the need to pay rent or spend money on groceries, these young adults have much more disposable cash to work with and spend. Bloomberg reported that millennials and Gen Z have driven sales of luxury goods upwards, like purses, watches, and jewelry. “This is, of course, not the only reason luxury-goods consumers are getting younger in the West (social media playing also an important part), but we see it as fundamentally positive for the industry,” the analysts from Morgan Stanley wrote. Americans are not the only ones experiencing this phenomenon. Similar trends are occurring among young adults in the United Kingdom. About 42% of young adults in the UK lived with their parents in 2021. Now living at home doesn’t have the same connotations as it once had.
With more young adults finding themselves and choosing to live at home for more extended amounts of time, the effects on the luxury business and the economy are bound to be felt across industries. Stay tuned while this story develops.