A new survey shows Gen Z is apparently failing to launch and foregoing traditional rites of passage in favor of staying at home with their parents for an extended period of time.
Over the last half decade, young Americans have found themselves returning home, or never leaving, as they face one of the worst economies to start fresh in.
According to a recent study conducted by Intuit Credit Karma, 31% of Gen-Zers age 18-27 have struggled to flee the nest and currently live at home with a parent or family member.
"The current housing market has many Americans making adjustments to their living situations, including relocating to less expensive cities and even moving back in with their families," Courtney Alev, consumer financial advocate at Intuit Credit Karma, said in a statement.
Among Gen-Zers who have left the nest, 27% told Credit Karma that they can no longer afford to pay their rent. To make ends meet, 41% of Gen Z renters are having to sacrifice necessities to pay their rent. Another 25% of Gen Z renters are dependent on money from their family to remain in their current housing.
A recent analysis by consulting firm McKinsey and Company, shows the median annual income for Gen Z is $38,325, and members spend 37.3% of their income on housing.
Credit Karma says the cost of housing has cast a shadow on homeownership in America. The data indicates nearly half of Americans (46%) believe they will never be able to buy a home. Of those who are not in the market for a home, 49% say mortgage rates and inflation have made it impossible for them to buy right now, while another 29% say they're fearful of buying a home because they're worried about their job security.
Of the 24% of Americans who are currently in the market for a home, 59% say they're motivated to buy a home because rent is so high, Credit Karma reported. However, the survey also shows that 30% say they're dependent on money from their family to make the purchase.
"Our research shows more than half of Americans (57%) allocate the majority of their income toward housing costs, leaving little room elsewhere in their budgets," Alev said. "In general, it's recommended that consumers allocate half of their income for essentials, including housing and other necessities, like groceries and household bills. The remaining 30% should go towards nonessentials – things like dining out and entertainment – and 20% should go towards financial goals, such as saving an emergency fund or paying down debt."
"If your housing costs exceed 50% of your budget, you might consider looking for other housing options," Alev added. "That could mean switching neighborhoods or moving in with roommates to cut costs."