The traditional concept of the American Dream, defined by owning a house and a car, is evolving as increasing numbers of young Americans grapple with economic insecurity.
A substantial percentage of recent college graduates move back in with their parents due to the financial challenges of post-graduation life, including the unaffordability of housing.
A poll conducted by Harris Polls for Bloomberg News reveals that 45% of Americans aged 18 to 29 live with their parents, marking the highest proportion since the end of the Great Depression.
The housing market in the United States has seen a surge in prices and mortgage rates, making homeownership increasingly out of reach for many.
The average home price in the second quarter of 2023 was $495,100, not far from the all-time high set in 2022, with prices having risen by over $100,000 since the beginning of 2019; this has led to a 44% drop in mortgage applications, the lowest level in 28 years.
Renting, too, has become a costlyendeavour, with the median asking rent price reaching $2,052 in August, just $2 less than the all-time high set a year prior.
The housing market is influenced by young renters and institutional investors who have entered the market in large numbers, contributing to the overall rise in house prices.
Furthermore, young Americans often carry substantial college loan debt and credit card debt, making them sceptical about the attainability of the American Dream.
A July survey by Life and My Finances found that half of borrowers struggle to cover their student loan payments. The burden of student loan debt, which stood at $1.77 trillion in the second quarter of 2023, has raised questions about the value of a college education, with enrollment numbers declining.
College graduates choose to live with their parents for various reasons, including financial support and debt repayment.
In a time when many factors are working against recent college graduates, living with their parents provides some financial relief, allowing them to weather the economic storm and save money for the future.
This choice reflects young Americans’ evolving priorities and challenges in pursuing their version of the American Dream.