To help offset inflation and cost-of-living expenses, some Americans had to sell personal belongings or pull money from a savings or retirement account, while others got a new job or started a side hustle. However, many decided to move in with roommates or back home with family members to reduce their expenses.
According to our survey, 72% believe multigenerational households are more accepted today due to cost-of-living hikes. 52% believe there is a stigma associated with moving back in with family as an adult. 41% believe there is a stigma associated with getting a roommate as an adult.
To highlight the specific ways Americans have been personally impacted by such extreme cost-of-living hikes, we surveyed 2,000 U.S. adults who either moved back in with family or got a roommate in 2022 due to inflation or cost-of-living increases.
Read on to learn more about why so many Americans have had to make adjustments to their living situation this past year and what they think it means for their future.
The Personal Impacts of Inflation and Cost-of-Living Increases
According to our survey, 71% say inflation significantly impacted them in 2022. 71% say homeownership is an ultimate goal for them. 71% believe the generation after theirs will struggle to own a home more than their generation. 61% believe their financial situation will be better in 2023 compared to 2022. 59% say inflation and housing cost increases made them consider moving to another city.
About 71% of respondents say inflation or cost-of-living increases had a significant personal impact on them in 2022, affecting their financial decisions and how they allocate their spending. As inflation increases, the buying power of their take-home pay decreases, and most employers can’t afford to increase wages proportionally with inflation.
When asked to select the reasons for moving back home or with roommates, 59% responded that inflation made it difficult to cover day-to-day expenses, such as groceries and gas for their cars. The second reason was cost-of-living hikes that made it harder for respondents to pay rent or mortgage payments (56%), while 54% reported that it was difficult to pay utility bills, such as gas, electricity, and water.
Survey respondents were also asked what most negatively affected them in 2022. For many, food price hikes specifically (68%) – which increased 13.5% between August 2021 and August 2022 for food at home – had the biggest impact on their budgeting decisions. Next was rent price hikes (56%), which saw the national median hitting $2,000 in the first half of 2022 (a 15% year-over-year increase), according to Redfin. Lastly, wage stagnation ranked in the third spot (42%).
The following most negatively impacted Americans in 2022: food price hikes, rent price hikes, and wage stagnation.
Simply put, many U.S. adults couldn’t afford to pay for both a home and living expenses. And so, many decided to move in with family or split the bills with a housemate in order to subsidize costs.
Most Respondents Have Considered Moving Out of Town
According to the survey results, people’s need to move isn’t necessarily a short-term solution. More than half (52%) expect to live in their current situation for more than a year. In order to move out of the family home or no longer require a roommate, 54% said inflation must fall, while 52% said they need a new primary job or a pay increase if inflation doesn’t fall and return to normal levels.
Cities like Los Angeles, Miami, and San Diego (the top three most expensive cities to live in the United States) are continually pricing people out of their metros. While career opportunities may be abundant and wages may seem competitively high in these areas, inflation simply makes them unaffordable for most individuals.
It’s no surprise then that 59% of all survey respondents have considered moving out of town in order to cut back on certain costs, while 10% already have made the decision to move in order to combat inflation and housing costs.
How Inflation and Cost-of-Living Will Affect Americans’ 2023 Outlook
According to our survey, 50% believe homeownership will be realistic for aspiring new homeowners in 2023 and 50% believe homeownership will not be realistic for aspiring new homeowners in 2023.
This financial setback has created ripple effects in the current and future lives of Americans. While young adults traditionally considered buying property and starting families once they left home at 18, that starting line has been pushed back due to inflation and the pandemic.
According to the National Association of Realtors, the average age of the typical first-time buyer was at an all-time high in 2022 at 36 years old. Even with the abundance of programs for first-time homebuyers, 50% of all respondents believe that homeownership will not be realistic for new American buyers in 2023. For 71% of respondents, homeownership is their ultimate goal, but now they’ll be forced to wait even longer to achieve this dream.
Even worse, 71% of those surveyed believe that the next generation after theirs will face more struggles when it comes to purchasing a home. And these financial worries can lead to other delays as well, such as having children.
Among respondents (38%) who indicated they considered starting a family or continuing to add to their family in 2023, 74% reported that they were reconsidering that decision specifically due to inflation and cost-of-living increases. When you consider all the necessary medical bills, supplies, and, in most cases, the need for a bigger home, the higher costs associated with expanding a family seem to be simply out of budget for most American adults today.
With a lot of uncertainty surrounding the economy and finances, many are wondering if the best solution is to wait it out before making life-changing moves like taking out a mortgage or having children.
It May Take Years for Americans To Return to Financial Stability
Most respondents say that the number one thing that must happen in order for them to move out and live on their own is for inflation to fall and return to more normal levels. Unfortunately, most experts believe it will take a few years before Americans see a real difference in their bank accounts.
Roughly 61% of those surveyed at least feel that their financial situation will be better this year compared to 2022, while only 22% believe their financial situation will decline. In the meantime, many Americans must weather the financial storm of inflation and cost-of-living surges in the U.S. by changing their living situation and looking for ways to cut costs.
Our 360 Reviews team used the third-party survey platform Pollfish to conduct a national survey of 2,000 U.S. adults who either moved back in with family or got a roommate or housemate in 2022 due to inflation or cost-of-living increases. People identifying as female comprised 53% of respondents, while those identifying as male represented the remaining 47%. Responses were then weighted in order to reflect the current U.S. population by achieving equal distribution with known population characteristics.
Source: US News