Why 25 Million Adults Living at Home Is Bullish for Multifamily

Here’s a pretty crazy stat:

There are 25 million grown adults sleeping in their childhood bedrooms tonight.

A complicated confluence of factors has led to many young adults delaying the traditional “life milestones,” including moving to a place of their own.

A common narrative is that this is a broken generation. And while that may or may not be an accurate characterization, it’s far from the only way to look at this situation.

Because if you’re deciding where to put your next investment dollar, you should see this setup as a coiled spring – a wave of renters that hasn’t hit the market yet.

I believe that wave is one of several forces lining up behind multifamily over the next five years. None of them have hit the occupancy reports yet. And that’s the point – by the time they do, they’ll already be priced into every deal, and the opportunity will be gone.

The 25 million renters the occupancy data doesn’t see

About 25.2 million young adults between 18 and 34 are living with family right now. That’s roughly one in three…a record number.

Most headlines portray this story as one about a stuck generation. But read it as an investor, and it’s easy to see it as demand that’s been deferred, not destroyed.

These people don’t stay in the childhood bedroom forever. And when they leave, they rent first – almost nobody goes straight from a parent’s spare room to a mortgage, especially when the payment gap between renting and buying is as large as it is.

The last time this pool of young adults came anywhere close to its current size, household formation ran strong for a five-year stretch. This isn’t to say that the trend will repeat perfectly, but it’s clear that there’s a reservoir of future renters building up for release.

The on-ramp to ownership moved a decade down the road

The second force at play here is how long those future renters will rent before buying.

The path from renter to buyer used to be predictable – rent for a few years after high school or college, save a down payment, buy a house in your early thirties.

But that path has stretched significantly. The median first-time homebuyer is now about 40 years old. Fifteen years ago it was 30. Even just five years ago it was 33.

This is a structural change to the economy. Wages, home prices, and student debt (among other things) shifted the timeline – and it’s not something where the Fed can wave its magic rate wand and immediately reverse that kind of drift.

The twenty-somethings who would have bought a house a decade ago are closing in on 40 now, still signing apartment leases for yet another year.

Every year the on-ramp slides later, the renter pool ages up and stays put. And while this isn’t good for achieving the “American dream,” it’s undeniably good for real estate investors – it results in longer tenancies, higher renewal rates, and less money burned turning over units.

The cranes are already gone

The third force is one I wrote about at the end of 2025: the collapse in new multifamily construction. That collapse hasn’t slowed down:

• Starts: lowest since 2012, 40-50% below the 2022 peak
• Completions: down ~30% YoY as of Q1
• Deliveries: projected to roughly halve by 2027

The last vestiges of the post-Covid construction boom are being delivered right now – exactly why concessions are elevated in high-supply markets. It looks like softness in the data.

All of that supply was permitted two and three years ago, and once it clears, there’s very little behind it. And as that delivery pipeline thins, those concessions should start to compress back into real rent growth.

The soft rents you see today are the last of an old building boom clearing the system. What comes next is thinner supply and firmer rents.

To be fair, this call isn’t unanimous. Yardi recently raised their completion forecasts for 2026 through 2028. If they’re right and more supply shows up, the relief arrives slower than the bullish case assumes.

Three forces, one direction

A record pool of would-be renters still in the childhood bedroom. Renters aging up and staying put once they leave. A construction pipeline that has fallen off and won't refill overnight.

None of that means apartments boom this quarter. I think the near term is still choppy, especially in the oversupplied metros.

This choppiness (and the headlines it creates) is sure to give some passive investors pause about putting more capital to work in multifamily.

And a pause can seem reasonable. But the “coiled spring” only stays coiled while the numbers look soft. Wait for the occupancy reports to confirm the story, and you’ll be chasing the same deals as everyone else – at prices that reflect it.