One-Third of Gen Z Still Lives With Parents, Data Shows, Pointing to Pent-Up Housing Demand

Written by:

Rudi Davis

Date:

26 Jan 2026

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About one-third of Americans aged 18 to 25 continue to live with their parents, according to Yardi Matrix data, a share that has remained unchanged since before the COVID-19 pandemic. Doug Ressler, manager of business intelligence at Yardi Matrix, says the persistence of this trend suggests not a temporary disruption, but a structural barrier preventing many young adults from entering the housing market.

“Recently, John Burns came out with a study that looked at pre-COVID and post-COVID Gen Z, eighteen to twenty-five, still living at home,” Ressler says. “That percentage really hasn’t changed, about thirty-three percent. So about a third of people who would typically be leaving home and forming new households are still living with their parents, which is a critical demographic metric to watch.”

Ressler argues that this stalled household formation represents a large pool of unmet housing demand. Rather than reflecting a lack of interest in independent living, the data points to affordability constraints, credit requirements, and limited access to suitable entry-level housing.

When members of this group do enter the market, Ressler says they are likely to seek lower-cost housing options that require smaller down payments and offer more flexible credit standards than traditional single-family homes.

Millennial Housing Preferences

While Gen Z remains mainly on the sidelines, millennials—now in their family-forming years—are driving a different segment of housing demand. Ressler says many millennials are looking for more space at attainable prices, but not necessarily through conventional site-built homes in urban cores.

“You see people establishing families, especially millennials, who need more space and are looking to manufactured housing to meet those needs,” Ressler says. “Another growing market is build-to-rent.”

This demand, he notes, is not primarily driven by financial distress. Instead, many millennial households have purchasing power but prioritize value, space efficiency, and flexibility over traditional ownership models. As a result, they are increasingly open to alternative housing formats and locations outside major city centers.

The Rise of Exurban Development

Ressler points out that manufactured housing and build-to-rent communities are often concentrated in exurban areas—on the outer edges of metropolitan regions—where land is more available, and development costs are lower.

“You typically see these sites in the exurbs, on the border areas of urban cores,” Ressler says. “Central business districts have higher density and land costs, but in the exurbs, there’s more availability and lower prices.”

These locations also align with shifting household preferences, offering more space and relative affordability while remaining within commuting distance of employment centers.

The Financing Infrastructure Gap

Despite growing supply in manufactured housing and build-to-rent, Ressler says financing systems have not kept pace. Mortgage products, underwriting standards, and down payment requirements are still primarily designed for traditional site-built housing, limiting access for younger and first-time buyers.

“Short of the Bank of Mom and Dad, you have to be able to come up with a certain percent down,” Ressler says, describing a key hurdle for many households.

As a result, even when alternative housing options are available, many potential buyers and renters remain unable to access them due to credit constraints, documentation requirements, or limited lending products tailored to non-traditional housing types.

Ressler says government agencies and the secondary mortgage markets have been slow to adapt, but he expects that to change.

“Over the next couple of years, you may see agencies like HUD, Fannie Mae, and Freddie Mac make lending more flexible,” he says. “That could help more people get into housing in the U.S.”

Broader Market Implications

Taken together, these trends suggest that housing demand is being constrained less by household preferences and more by structural mismatches between supply, location, and financing. A significant share of Gen Z remains unable to form independent households, while millennials increasingly turn to alternative housing solutions that better match their needs.

If lending standards and mortgage products evolve to support manufactured housing and build-to-rent developments, Ressler says a large segment of sidelined demand could begin entering the market. How quickly financial institutions adapt may determine whether these housing formats can scale beyond their current niche and absorb the pent-up demand from younger, value-focused households.

As demographic pressures continue to build, the ability of the housing finance system to align with changing supply and household behavior could play a decisive role in shaping the next phase of the U.S. residential real estate market.