Almost half of adults ages 18-29 live with parents and spend their money on luxury goods

Inna D
Adult living at home with parentsPhoto

A record-high number of young adults are living with their parents, which is contributing to an explosion in the luxury goods market, according to a recent report from Morgan Stanley.

The U.S. Census data reports that, for the first time since the 1940s, 49.5% of adults ages 18-29 in America are living with at least one of their parents. The number reached a peak in 2020 due to the pandemic, however, young adults have not moved out, even after Biden declared the pandemic "over" and many returned to work or at least a hybrid setup.
Graph: Quartz ; Data: Morgan StanleyPhoto

With more disposable income, these adults are driving a boom in luxury goods sales. From Bloomberg- analysts led by Edouard Aubin at Morgan Stanley said the trend benefits discretionary spending and is partly responsible for the surge in popularity of handbags, watches, and jewelry. 

“When young adults free up their budget for daily necessities (e.g. rent and grocery), they simply have more disposable income to be allocated to discretionary spending,” the Morgan Stanley report said.

The US overtook China last year as the top destination for luxury Swiss watches as Americans rediscovered a passion for mechanical timepieces.

This comes as a study from The Pew Research Center reveals that many Americans see young adults living with parents as "bad for society".

Over a third of Americans (36%) say that more young adults living with their parents is bad for society, while 16% say it is good for society. Nearly half of Americans (47%) say it doesn’t make a difference. 

Rising inflation, rent increases, and soaring home prices have left many adults without much option. However, it seems that rather than saving, many young adults are choosing to spend. Or rather, see it as an "investment", an asset likely to hold its value. As Bloomberg reported, Chanel bags have only increased in value from last year. So it may not be as silly of a decision after all.

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