Returning home: The impact of the pandemic recession on GenZ and millennials

What two recessions and a global pandemic mean for young adults attempting to launch

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young woman is greeted at the front door of a home by her parents

They’d rather be out on their own, but the pandemic has led millions of young people to move back to their family homes. Roughly 2.1 million more U.S. adults — most between 18 and 29 years old — were living with a parent or grandparent in April, 2020, compared to a year earlier, according to the U.S. Census Current Population Survey data. And though the trend is already beginning to turn around, it’s forcing life changes that are likely to linger.

“We’re very skilled and we have a lot going for us. What we don’t have is the finances to back that up.”

Erin LaDuke

Then-28-year-old Erin LaDuke was part of that migration back to the nest. She and her fiancé already had plans to move back home to the east coast from their adopted city of Anchorage, Alaska. The pandemic accelerated the move. “Because Alaska is all by itself up there, if things weren’t going well with the pandemic, it would be super easy to be just totally cut off.” 

So, on a Friday in March, LaDuke and her fiancé agreed it was go-time. Over four days, with the help of friends, they “sold, donated or rehomed all our furniture, sold two cars, and packed everything else in flat rate boxes.” Three airports later, the couple and their two cats landed at LaDuke’s family home in rural upstate New York. “Our luggage got stuck in Detroit, so we literally had the clothes on our backs,” LaDuke says.

With COVID, the Great Recession and 9-11, millennials like LaDuke have already experienced three major disruptions in their lives. While the long-term effects of the current recession aren’t yet known, it’s clear the journey into home ownership for millennials and the younger Generation Z is different than the generations that preceded them. 

Missing Households

Economists have this phrase, “missing households,” to describe the fact that fewer people are striking out on their own to find places to live. Zillow economists estimate there are 5.7 million missing households today — the number of new familial units Americans would have formed if people moved out of the nest at the same rate as they did in 2006.

Before moving home, LaDuke and her fiancé were saving for a down payment to buy a house. That cash has turned into their COVID emergency fund. LaDuke says it’s not that millennials don’t want to buy, “but unless our generation has that big chunk of family support or really lucks out or desires to live in a really less expensive place, it, it’s not possible.”

LaDuke says low wages are the biggest barrier. Incomes have failed to keep pace with increasing home values. A Zillow analysis shows that since September 2014, home values have grown 38.3 percent, roughly double the pace of homeowner income growth (18.8%) over the same period. “It’s not a moral failing (of millennials),” says LaDuke. “We’re very skilled and we have a lot going for us. What we don’t have is the finances to back that up.”

“There’s a strong chance I’ll stay home.”

Icarus DeOsu

Prospects for Generation Z

Before the pandemic, most economists expected GenZ would enter adulthood in a strong economy with low unemployment. Now, Zillow economist Jeff Tucker says, “a prolonged setback would leave many members of GenZ delayed by years on their road to independence,” in much the same way that the millennial generation was set back by the Great Recession.

“I feel a strong jadedness,” says 21-year old Icarus DeOsu. He’s a third-year music education major at Pacific Lutheran University, east of Tacoma, Wash. He moved back home last spring when the dorms shut down to live with his mother, stepfather and three brothers, the youngest of which is two. 

DeOsu wants to return to campus after the pandemic but says “there’s a strong chance I’ll stay home” because of the burden of college loans; he expects the final tab to be over $60,000. But DeOsu doesn’t see himself on the same path worn by the generation ahead of him. “Millennials got caught holding the bag,” with the Great Recession he says. “So, whatever we do, we can’t just do the same thing.” 

He wants the government to build programs he thinks are long overdue — universal healthcare, better protections for workers, guaranteed paternity leave and better maternity leave.” Buying a home isn’t on his radar yet. First, DeOsu’s got to finish college and land his dream job — high school band director. “And if that ruins my life because our economy is broken, I’ll just be a broke music teacher,” he says. “I can’t see myself doing anything else.”

“Looking at my bank account and trajectory, it’s going to be at least five to ten years.”

Erin LaDuke

The path forward

As 2020 came to a close, the number of young adults nationwide who still reported living with parents or grandparents had fallen substantially. As of November, there are only about 250,000 more 18-25 year olds living with parents compared to the same time last year, compared to 2.2 million extra in June, according to U.S. Census figures. 

LaDuke and her fiancé moved back out of the family nest in October. They were able to save a lot of money during the six months they lived with LaDuke’s parents. Most of that went to paying the first six months of rent on the home they found in Western Mass. Both were unemployed when they signed the lease and could not find a landlord willing to accept just first and last month’s rent plus a deposit. 

The good news: LaDuke started a new job at the beginning of December, as a behavioral health specialist at an elementary school. “We’re remote, and helping hyperactive children on a screen is not easy, but it’s going well.” 

The couple still want to buy a house someday, but LaDuke says “looking at my bank account and trajectory, it’s going to be at least five to ten years.” That’s consistent with the narrative for millennials — they’ll get there, it will just take longer.  


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