Among various social groups, Generation Z is the most significantly impacted by the housing affordability crisis.

Compared to their parents at the same age, today's young people have higher rates of college degrees and full-time employment, but this is accompanied by a heavier burden of student loan debt, which has become a major obstacle to their life's start.

Meanwhile, the prices of goods and services continue to rise, but wage growth is far from keeping pace with the soaring costs of daily expenses. The latest analysis from the Urban Institute shows that between 2017 and 2025, median weekly income increased by 38%, while rent increased by 50%, highlighting the growing imbalance between income and expenses.

Americans of all ages are struggling with rising living costs, but research from the Century Foundation indicates that nearly half (49%) of adults aged 18 to 29 have delayed or forgone medical care due to financial difficulties, a higher proportion than any other age group. Furthermore, this group frequently experiences situations such as skipping meals and using savings to make ends meet due to financial constraints.

There are no signs of relief from the cost pressures faced by young people. With the rapid development of artificial intelligence reshaping the labor market, the number of entry-level positions available to recent college graduates continues to shrink.

Data from the National Association of Colleges and Employers (NACE) shows that employers expect only a slight increase of 1.6% in hiring for the graduating class of 2026 compared to 2025. Some experts believe this is just the beginning of an AI-induced white-collar recession, and young workers may be the most severely affected group.

Driven by economic pressure, fewer and fewer young people are able to achieve financial independence.

Multiple studies show that about half of parents (a historical high) are currently providing significant financial support to their children, covering basic monthly expenses such as food, utilities, and rent.

Data from the U.S. Census Bureau shows that the proportion of young adults living with their parents peaked during the pandemic and then declined, but is now slowly rising again. 2025 census data shows that about one-third of American adults aged 18 to 34 live with their parents, a slight increase from the previous year. 

“The Dependency Cycle”

Edward Long, head of Avity Investment Management in Greenwich, Connecticut, which ranked 75th on this year's CNBC Financial Advisor 100 list, said that after years of stock market gains, more parents are able to provide financial support to their adult children.

However, he noted, “This can also lead to children becoming dependent on these funds, creating a dependency cycle.” He added, “This is something we’ve discussed with our clients. In many cases, children who receive large gifts of money become reliant on that money—it creates expectations and dependence.”

Long further stated that even so, many parents are unable to support their children into their 30s, especially “for couples with fixed incomes in retirement.”

Another study conducted last year by Ameriprise Financial of over 3,000 parents found that 98% of parents said they would allow their children over 21 to live with them, and that financial support didn't stop there.

The study also showed that in addition to providing housing, parents continue to financially support their children into adulthood.

Approximately 63% of parents pay for everyday expenses such as phone bills for their children over 21; nearly half (45%) pay for their adult children's health insurance until they reach age 26 (the legal limit); and 33% provide financial support for their children's education after college graduation (including graduate school).

“It’s understandable that parents are watching their adult children struggle in the changing economic realities of the post-pandemic era, and they want to step in and help their children build a solid financial foundation,” Deana Healy, vice president of financial planning and advice at Ameriprise Financial, said in a statement.

The study showed that 65% of parents believe they still have enough money to enjoy their retirement, but 36% are concerned that financial support for their adult children may impact their own retirement plans.

“Parents should be mindful of how the choices they make now and in the future to support their adult children will impact their own goals, particularly retirement goals,” Healy said.

Long of Avity suggested that support for children should be incorporated into comprehensive financial planning. “We advise clients to utilize the gift tax exclusion to give money to their children,” he said. “This allows children to receive funds while also providing parents with a good perspective on estate planning.” In 2026, the annual gift tax exclusion is $19,000.