Business

Why are millennials living at home? Housing costs and student debt, for starters

Recent college grad Gabriel Howson, 22, at home in Dorchester with his mother, Monica Beato-Howson.
Barry Chin/Globe Staff
Recent college grad Gabriel Howson, 22, at home in Dorchester with his mother, Monica Beato-Howson.

Monica Beato-Howson’s dining room was starting to look more like a dorm room earlier this month, cluttered with books, linens, lamps, and clothing. The interior decorator was her son, Gabriel Howson, who graduated in May from the University of Southern Maine.

As he opens the next chapter of adulthood, Howson, 22, has landed a $16-an-hour job at Brigham and Women’s Hospital’s shipping and receiving department, while he looks for a job in real estate investment.

He has also moved back to his parents’ home in Dorchester — part of a new twist on the so-called boomerang trend that has come to define a generation of millennials. But now they’re moving back in greater numbers, and for a different reason than a decade ago, when employers weren’t hiring because of the recession. Today, younger millennials in Greater Boston are graduating into a robust economy, but a blisteringly hot housing market makes it difficult for many to spread their wings.

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With Boston-area apartment rents so high, Howson doesn’t earn nearly enough to go out on his own. Temporarily staying at home, he said, will allow him to save money and — more urgently — start whittling away at $75,000 in student loan debt.

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“Even a one-unit apartment would be $2,000 a month,” said Howson, who graduated with a degree in risk management and insurance. “I don’t think it’s even possible without three roommates.”

In Boston, 30 percent of recent college graduates in their 20s lived with their parents in 2016 — up from 20 percent a decade prior, according to a recent analysis of Census data by real estate website Zillow. Nationwide, that figure is 28 percent.

The rental market isn’t helping matters. In the first three months of the year, the average monthly apartment rent in Greater Boston rose to $2,152, up 4 percent from the previous year, according to the real estate firm Reis Inc. That was the quickest pace in nearly two years. Meanwhile, the median price for single-family homes and condos in the region hit record highs in April at $612,000 and $593,629 respectively, according to the Greater Boston Association of Realtors.

And then there’s another record high: Student debt loan in America this year hit $1.5 trillion, according to the Federal Reserve.

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“With rents continuing to climb and pretty serious competition, it makes living with mom and dad to pay off that debt — for a year, or two, or three — seem like a good investment,” said Sarah Mikhitarian, a Zillow economist. “It helps your savings cushion.”

It also requires patience on the part of parents who might have been looking forward to becoming empty-nesters.

Beato-Howson said she is not charging her son rent but will probably assign him a household bill to pay, “so he can learn responsibility.”

She and her husband, who both work at hospitals, have a full house: Their 27-year-old daughter and her 4-year-old daughter also live in their three-bedroom home. Beato-Howson said her daughter, who works at a doctor’s office in Cambridge, commuted to college and has lived with them since.

Having grown children at home can be challenging, but Beato-Howson said she won’t set a deadline for them to move out. “Hopefully, they’ll find their way on their own,” she said.

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For recent grads, moving in with Mom and Dad may be fiscally prudent, but it’s also a reminder that they’re not truly independent, said Jessica Alves, who moved back home to Dorchester last fall to finish her last semester at the New York Institute of Technology remotely after her financial aid ran out. She completed her course work in December but officially graduated last month.

“To be completely honest, I wish I was in my own space,” said Alves, 26, who recently started working at Boston accounting firm RSM.

Like Howson, Alves is not paying rent. She’s on an aggressive $2,000-a-month payment schedule to wipe out her tuition balance by July, in addition to paying her cellphone and credit card bills. Her goal is to live at home for two to three years and save enough money to buy a triple-decker in Dorchester where she can live and rent out the other units. But with the housing market showing no signs of slowing down — some triple-deckers in Dorchester have recently sold for $1 million — that’s starting to look more like a fantasy scenario.

“There’s a possibility I may have to drop my plan and have to figure things out. It’s something that I think about quite often and it gives me anxiety,” Alves said. “It puts a lot of pressure on recent grads to kind of fall back and stay with their parents maybe a couple more years after graduation, whether they like it or not.”

As a whole, millennials age 25 to 35 are living with their parents longer than Gen X-ers and baby boomers before them, according to a Pew Research Center analysis. The issue received more attention recently because of the case of a 30-year-old New York man whose parents sued to evict him after he refused to move out of their home.

“It’s fascinating that people in their 30s are still relying on mom and dad largely because housing has gotten so unaffordable,” Mikhitarian said. “It’s difficult when you’re spending 40 percent of your income on rent or a mortgage.”

Howson — who is aiming to move out of his parents’ place in a year — said he feels none of the so-called failure-to-launch stigma that earlier generations of postgraduation young adults faced. Many of his friends also are living at home while they work to save money, he said.

“A lot of parents now are more understanding about that stuff,” Howson said. “It’s not as cheap as when they came to Boston.”

Katheleen Conti can be reached at kconti@globe.com. Follow her on Twitter @GlobeKConti.