Why millennials are smart (not entitled) for living with their parents

The share of young Americans living with parents has reached its highest in 75 years.

Nearly 40% of millennials are now living at home, according to an analysis of 2015 U.S. Census data from real estate listing site Trulia — the largest percentage since 1940. This is backed up by data released earlier this year by the Pew Research Center, a nonprofit, nonpartisan think tank in Washington, D.C. For the first time in more than 130 years, American adults aged 18 to 34 were more likely to be living in their parents’ home than living with a spouse or partner in their own household, it found.

But before you get started on entitled, lazy millennials you should know this is not necessarily a bad thing, said Greg McBride, chief financial analyst at personal finance website Bankrate.com. Most young Americans are just being financially savvy, he said.

“Millennials have a greater inclination towards saving than their predecessors, and it’s easier to save when you’re living at home than it is when you’re out on your own,” he said. “Those years at home help establish a solid financial foundation so that they’re in a better position when they do move out.”

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Though the financial hurdles to homeownership are significant, McBride said social changes are the biggest driving factor in this uptick. The relationships between generations now are much closer, making living under the one roof easier (in theory at least). “The biggest reason is that is more accepted now among parents and their adult children and there is no social stigma to a 26-year-old still living at home,” he said.

And forging a strong relationship with one’s parents into young adulthood may be preferable to getting married at a young age, before you know what you really want in life. “Dating back to 1880, the most common living arrangement among young adults has been living with a romantic partner, whether a spouse or a significant other, the Pew data found. In 1960, 62% of 18- to 34-year-olds were living with a spouse or partner in their own household — the highest on record — but that percentage has steadily fallen since then.

Building this foundation helps some millennials to skip the starter home and jump straight to a larger home in the suburbs when they do decide to buy, McBride said. Bankrate.com has found millennials between the age of 26 and 35 have the same preference for real estate as any other age group up to 70.

However, with interest rates and house prices rising, young people may want to put money down on their own place sooner rather than later. The vast majority of millennials — 80% — still wants to buy a home someday, but 72% said they don’t plan to until at least the end of 2018, the Trulia study found, but many of these young Americans just don’t have the money to buy yet. Though the unemployment rate is going down, wages have been stagnant, and the average young person is graduating with more than $ 30,000 in student loan debt, putting monthly payments on a mortgage out of reach.

The largest barrier to owning a home is putting down enough money for a down payment, said Cheryl Young, Trulia’s senior economist. “I think people are still very interested in that American dream of homeownership it’s just taking longer,” she said.

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