Why Do Young Adults Co-Reside with Their Parents?

Nearly one in every two adults aged 18–29 currently lives with their parents, compared to slightly more than one in four in 1960. The literature focuses on changing labor market conditions and marriage-childbearing delays to account for this shift. Using a Blinder-Oaxaca procedure, we identify a role for housing affordability as an additional factor in the increase in co-residency since 2000. We endogenize the marriage-childbearing decision with a Heckman selection model and attribute up to a quarter of the observed 9-percentage-point increase in the co-residence share between 2000 and 2021 to a decrease in housing affordability measured by the ratio of median rent or median housing value to median household income