Rising adult cohabitation and housing market constraints have created a 4.3 million household deficit in the U.S.
More American adults are living with family or housemates today than at any time in decades, leaving a deficit of 4.3 million households compared to 2010 levels—a gap linked to housing market constraints.
There are currently 135 million households across the U.S. instead of the 139.3 million that would be expected if 2010 living patterns remained unchanged, according to a new report from John Burns Research and Consulting (JBRC).
A key driver of this trend is the growing number of adult children living at home instead of moving out.
As recent research from Realtor.com® revealed, a record 25.2 million adults under age 35 lived with their aging parents in 2025, representing nearly 1 in 3 young adults.
Another notable development in household composition is that more married couples are staying together, due to declining divorce rates and longer life expectancies.
Between 2010 and 2024, the overall U.S. divorce rate declined from about 3.6 to 2.4 per 1,000 people, according to the U.S. Centers for Disease Control and Prevention. During roughly the same period, life expectancy rose from approximately 78.1 years to 79.3 years.
Fewer children and solo seniors
Even as adult cohabitation increased, the average household size has shrunk from 2.54 to 2.42 people since 2010. The decline is largely driven by falling birth rates, with the number of children dropping from 63 to 51 per 100 households.
Based on 2010 metrics, an influx of empty nesters and seniors living alone after the death of a partner was supposed to lower the average American household size from 1.91 to 1.85 adults by 2025.
However, surging rates of cohabitating adults held that figure steady at 1.91.
"That means 4.3 million fewer households formed over 2010–2025 than would have formed without the shift," write JBRC CEO John Burns and VP of Demographic Research Eric Finnigan in the report.
A record 25.2 million adults under age 35 lived with their parents in 2025. The shortfall is not just due to youngsters living with their parents. Data shows that every age group is missing between 600,000 to 900,000 households, with the largest deficit recorded among 45- to 54-year-olds.
However, relative to their population size, Gen Zers bear the brunt of the deficit, with 15- to 24-year-olds missing 9% of their households, compared with just 2% to 4% for older groups.
Housing market constraints
These trends have crucial implications for a housing market dependent on household formation.
Typically, post-college 20-somethings move out of their parents’ homes, form independent households, and eventually purchase homes.
But high borrowing costs, heavy student debt, and inadequate entry-level wages have priced many young adults out of independent living.
A Realtor.com analysis from March estimates that housing supply scarcity and unaffordability have kept 1.8 million young households made up of 18- to 44-year-olds from forming.
"Demand isn’t just outpacing supply," says Realtor.com senior economist Hannah Jones. "It is artificially suppressed because suitable, affordable homes aren’t available."
Notably, according to the annual profile of homebuyers and home sellers released last year by the National Association of Realtors®, the median age of first-time buyers rose to 40 in 2025 from 38 the year before and from 33 in 2020, reflecting the persistent affordability challenges constraining the market.
The median age of first-time buyers rose to 40 in 2025 from 38 the year before and from 33 in 2020. Unlocking pent-up demand
Burns and Finnigan argue that the current 4.3 million household shortfall represents substantial pent-up demand. Unlocking it requires developers to build smaller properties that young people and seniors—many of them currently living with family—could actually afford to buy, ultimately driving new household formation.
As the report authors sum up: "We encourage cities and builders everywhere to zone and build more small homes that future households want to live in and can afford."
Jones agrees with that conclusion, stressing the importance of introducing to the market more starter homes with limited square footage to fit today's smaller families.
"Households will form faster when entry-level homes, both rentals and starter homes, become available at prices younger and lower-income people can afford," says the economist. "That takes more construction in that segment, along with zoning and permitting changes that allow smaller, lower-cost product."
Jones stresses, however, that small homes improve affordability only if they are actually priced lower, which has not always been the case.
A recent report on starter homes from Realtor.com shows that nationally, the share of entry-level properties has shrunk from 38.1% to 36.2% of active inventory over the past seven years, even as the median price rose from $260,000 to $340,000.
Simply put, there are 21,000 fewer starter homes available now than there were in 2019, and they are more than 30% more expensive than before.
To jump-start household formation, according to Jones, builders must offer smaller, well-priced homes across various housing types that cater to the distinct needs of young adults, empty nesters, and seniors.