Even before the recent rise in unemployment, young adults struggled to form new households and faced higher rates of cost burden
A sharp uptick in youth unemployment has intensified the already formidable housing challenges facing young adults in the United States, according to a new study from the Harvard University Joint Center for Housing Studies (JCHS).
The report found that the unemployment rate for those aged 16–24 jumped to 10.5% in August, a 2.7-point increase since 2022—far outpacing the 0.7-point rise seen across the broader labor force.
Even before the recent rise in unemployment, young adults struggled to form new households, faced higher rates of cost burden, and were less likely to receive housing assistance despite having lower incomes.
The share of first-time homebuyers in the United States plummeted to a historic low of 21% over the past year, while the median age of first-time homebuyers entering the market soared to 40, according to the NAR 2025 Profile of Home Buyers and Sellers.https://t.co/Gi2titBruU
— Mortgage Professional America Magazine (@MPAMagazineUS) November 5, 2025
Household formation stalls as incomes lag
Of the 30.5 million Americans aged 18–24 in 2023, just 5.2 million headed their own household, while 14.8 million remained with their parents.
“The low rate of household formation among young adults reflects their lower levels of education, workforce participation, and independent financial resources,” the JCHS study said.
Among those able to form a household, nearly two-thirds were classified as low income, and 82% rented rather than owned their homes.
Frequent moves are the norm: over half of young adult households had lived in their current homes for less than a year.
“With such low incomes in what is often a transitional stage of life, young adults are especially likely to rent and move frequently,” the report said.
Cost burdens hit hardest for renters of color
Housing costs are a major problem for young adults. According to the National Association of REALTORS (NAR), 77% of metro markets, or 176 out of 230, posted price gains, up from 75% in the previous quarter.
The JCHS study revealed that over half (54%) spend more than 30% of their income on housing. The number is even higher for renters at 58%, and it jumps to 90% for those with very low incomes.
The burden is even heavier for young renters of color: 68% of Asian and 66% of Black young adult renter households were cost burdened, compared to 55% of their white peers.
“Cost burdens were also high for young adult renter households headed by a person of color, given persistent discrimination and structural disadvantages,” the study said.
Assistance out of reach for most
Despite deep affordability challenges, just 9% of young adult households earning under $30,000 received housing assistance. That'swell below the 24% rate for all lower-income renters.
The report pointed to long waitlists, eligibility hurdles, and frequent moves as barriers to accessing support. “Young adult renters might also be disadvantaged in accessing assistance programs,” the study said.
With fewer job opportunities and high housing costs, many young adults, especially those with lower incomes or from minority groups, are finding it harder to secure stable housing.
The JCHS report stressed that stronger policies and more funding for assistance programs are needed to close these growing gaps.
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