However, Generation Z adults are less likely to own a home, be married, or have children.
Today's young adults are reaching these important milestones later than their parents did in the early 1990s, according to a recent report from the Pew Research Center. Pew surveyed about 1,500 adults ages 18 to 34 and more than 3,000 parents of adult children. Generation Z is generally defined as those born between 1996 and 2012, including a cohort of teens and tweens.
Although young adults today are far more likely to have a four-year college degree, work full-time, and earn a higher salary than their parents than their parents were 30 years ago, they are also more likely to have outstanding student loans, according to Pew .
Not only is it common to carry educational debt, but those amounts have also skyrocketed, the report said, largely due to rising college costs.
“She [Gen Zers] are more educated but take on a lot more debt, making it harder,” said Kim Parker, director of social trends at Pew.
Most people with student loans say their debt has forced them to postpone one or more important life milestones, other studies also show.
“Student loan debt prevents people from starting families, it prevents people from making decisions about their lives, about buying a house, about buying their first car, about getting married, about having children,” said Nicole Smith, chief economist at the Georgetown University Center on Education and the workforce, previously told CNBC.
But that's not the whole story.
In addition to high student loan balances, the recent rise in inflation has caused rental and property prices to rise.
According to a separate report from real estate firm Redfin, 2023 was the lowest year for home prices and mortgage rates in at least 11 years.
“There are so many housing cost challenges,” Pew’s Parker said. “This is a factor that holds young adults back.”
Meanwhile, 31% of Generation Z live with their parents because they cannot afford to buy or rent their own home, a separate report from Intuit Credit Karma found.
Even if you live alone, you still rely on your family for financial support. According to Pew, only 45% of young adults ages 18 to 34 say they are fully financially independent from their parents.
When I was growing up, 80 to 90% of people in my generation did better than their parents. And those numbers have dropped significantly.
Janet Yellen
Secretary of the Ministry of Finance
“When I was growing up, 80 or 90% of people in my generation did better than their parents. And those numbers have dropped significantly,” Treasury Secretary Janet Yellen recently told ABC News.
Most Generation Z members agree that it's harder to get by on their own now than it was for their parents when they started, multiple studies show.
Although consumers overall are more confident about the economy than they have been in years, young adults are blaming current conditions for the affordability issues they face — and coining the term “silent depression” to explain why financial independence is still lacking is being worked on.
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According to a report from Bankrate, about 38% of Gen Z adults and millennials believe they have a harder time feeling financially secure than their parents of the same age, largely due to the economy.
Additionally, 53% of Generation Z say higher costs are a barrier to their financial success, a separate Bank of America survey found.
According to a recent Prosperity Index study by Intuit, 73% of Gen Z respondents said today's economy makes them hesitant to set long-term financial goals.
Overall, the number of households with two or more generations of adults has been rising for years, according to another report from the Pew Research Center. Today, 25% of young adults live in multigenerational households, up from just 9% five decades ago.
As living with mom and dad has become more common for young adults, Parker says it has also become more socially acceptable.
According to Pew, parents today are more involved in their adult children's lives, often calling, texting and even monitoring each other with GPS apps — and adult children say they're largely okay with that.
“Both parents and young adults rate their relationships positively,” said Rachel Minkin, a research fellow at Pew.
Young adults living at home even say the arrangement has had a positive impact on their relationships and financial situation, and most also said they rely on their parents for advice when it comes to questions about work, finances and physical health .
According to Pew, these living arrangements actually have an economic advantage, and Americans who live in multigenerational households are less likely to be financially vulnerable.
These living conditions also have emotional benefits, Parker said. “It could be that the bond with their parents remains closer.”
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