Study finds millennials are moving back home to save money

There was a time when moving home after college meant defeat.

Maybe a post-grad job didn't work out, or a roommate found a new place to live. Some people simply couldn't bear to be away from comforts of living with mom and dad.

Granted, this was before the Great Recession of 2007 when about 71 percent of millennials lived independently; a figure that's dropped by four percent. The job market is stronger now, and the country's six-percent unemployment rate is at its lowest level since the U.S. economy collapsed, yet more and more graduates are choosing to live at home.

A recent study from the Pew Research Center found a reason for this, and it's not necessarily because millennials miss home cooked meals.

For one thing, wages haven't returned to pre-recession levels. College-educated individuals earn an average of $951 per week, versus $966 in 2007. Those holding only a high school diploma have median weekly earnings of $500 - $27 less than before - in the same time span.

College graduates earn more than non-collegiate counterparts, but many incur massive student loan debts in the process. In 2001, 26 percent of students took out these loans. Jump to 2010 and the figure nearly doubles to 40 percent.

A report from the Federal Reserve Bank of New York backs up the claim, concluding that students heavily reliant on student loans while still enrolled in school were "significantly and substantially more like to move home to parents when living independently." Similarly, they found dependent students saddled with the same loans were less likely to move away from their parents.

 "Student loan debt and difficulties paying off debt deter independent living among young adults," said Richard Fry, study author and researcher for the Pew. "Both the likelihood of borrowing for education and the amounts borrowed tend to increase with the young adult's education."

One of few positives coming out of the Great Recession is how it got high school and college students focused on higher education. Some enrolled because of the slumping job market, others because they saw how ill-prepared Americans were.

Lower incomes combined with high debts and rising housing rental costs leave millennials with few options, especially when rent accounts for 30 to 50 percent of spending.

"In the labor market, the outcomes of college-educated young adults have made the greatest rebound from the ravages of the Great Recession," Fry said. "Living arrangements seem to have come unhinged from cyclical labor market conditions as all young adults have become less likely to live independently as the recovery has progressed."