A small number of millennials are receiving financial support from their parents, and most of the funds are used to pay rent for an apartment or home they are leasing. We are not sure how surprising this figure is as people in their 20s have for generations either lived at home for a bit or received occasional financial support from their parents. But the data from Apartment List shows that as of late 2017 – early 2018, about one in 10 millennials have received some money for their housing or other bills. We actually think the 10% number is low and can be argued is a positive.
In fact, Pew Research currently shows that about 1/7 millennials as well as young adults live at home. Pew states that roughly 15% of people age 25 to 35 live at home, with the percentage decreasing as the age increases. So, the number of millennials age 25 living at home is much greater than 15%, and it rends down as the person ages…fewer than 15% of 35-year olds live at home according to Pew.
In addition, the region of the country also comes into play, with more living at home in more expensive parts of the country such as in southern California, the northeast and Pacific northwest, and other cities/regions with high cost of living. In fact this is a major factor when considering how much financial help the millennial received in 2017.
The dollar amounts provided are not huge. In most cases, it is around $1000 or so. In only 15% of cases will the millennial receive a large sum of cash; in those small number of instances the amount is around $10,000. In all cases the money is to help with everyday expenses and not for “frivolous” needs like a vacation.
The reason that the parent may give this assistance are wide ranging. Oftentimes the millennial may need a little help because of an unexpected expense, such as their car breaking down or maybe an unexpected medical bill. And that is no different than most people, as people of all ages may struggle a bit if they get hit by a bill that they did not plan for.
Of the one in ten millennials (or 10%) that are receiving rent help in late 2017 – 2018, about 2% of them are still in school. That number also seems very low to us, and honestly, we are surprised by it. We would have suspected that a higher percentage of young adults who are also in school would be getting housing assistance from their parents. The balance (about 8%) are not in school but are receiving rent help.
Millennial parents assist with home buying as well
Paying rent is one thing. But most people eventually have a goal of buying a home, whether in 2018 or some point in the future. While there are pros and cons to home ownership and buying a home is not by default a good investment (which is another article in of itself), the data from Apartment List shows that about 17% of young adults expect to get some money for a down payment if when they buy. The average amount they expect may range between $10,000 to $20,000. We just hope that if they “borrow” money from their parent they eventually pay them back!
This data on home buying also varies greatly. As an example, about 22.1 percent of millennials who live in the city of Denver expect help. In New York City, about 19% of millennials expect money from their parents for their down payment, and about 23% expect down payment help in Los Angeles. Even though the average home in northern California costs over one million dollars, the ratio is slightly lower in Silicon Valley and San Francisco. So, as we would expect, the data varies by city, region, and part of the country as the fact is some parts of the nation are more affordable than others, even when factoring in income levels.