Where will your kids live after college graduation? Graduates are likely to move in with their parents or into a co-living space due to high housing costs.

This spring, families all over the country are attending graduation ceremonies to celebrate the achievements of their college graduates. Graduates pushed through challenging coursework as they strived to prepare for their launch into the #worldofwork, and many took on significant student loans to complete their education, hoping it would produce more earning power or more rewarding careers.

But as you know, getting that career off the ground takes time. Know what else takes time? Paying down student loans. And, buying a house. Many recent graduates are encountering another major obstacle: housing costs. Research by HotPads warns, “The newest crop of graduates is worse off than their 2009 counterparts when it comes to housing. Over the past decade, the share of income recent graduates spent on the median rent increased from about 40 to 45 percent.”

Not only has the share of income going towards housing increased, HotPads observes that the amount of additional money college graduates make compared with non-graduates has been practically flat since 2000. Over the same period of time, student debt payments have more than doubled. The financial crunch is strong after graduation and graduates are motivated to find housing solutions to ease it while they settle into their new careers.

Living with Mom and Dad After Graduation

Over 12 million young adults aged between 24-36 years old live with their parents, up nearly 15 percent from 2005, according to research by Zillow.

It’s great that some parents are open to letting adult children live with them to avoid high housing costs, but they’ll want to make sure they don’t lose sight of their own financial goals. The problem is, some already are. A report by Merrill Lynch found that most parents provide financial support to children ages 18 to 34, spending twice as much on them than they do contributing to their own retirement.

Unless you’ve got a spare million bucks sitting in your savings account, this might not be your best financial move.

Most parents are willing to make a major financial sacrifice for their kids, but are their sacrifices helping children build wealth and achieve homeownership? Often, the idea is if an adult child lives at home they can save more towards a down payment for their own home, but the Urban Institute found no evidence that those who lived with their parents were able to buy more expensive homes or put more down. They found living with parents for a long time might, in fact, have a negative long-term impact on their wealth.

Communal Living After Graduation

Co-living involves sharing communal spaces for socializing and activities such as dining, housekeeping, entertaining, and so on. It’s a style of living that’s become more prominent as major cities deal with a shortage of affordable housing and steadily climbing rents. Common, a co-living operator, is planning $300 million worth of new properties in Philadelphia, Atlanta, Pittsburgh and San Diego over the next three years.

At Think Glink, we recently covered the rise of co-living, particularly in West Coast tech hubs like San Francisco where the cost of living is high and the average rent for a two-bedroom apartment is $4,181.

From College Graduation to Homeownership

Some graduates might be able to make the leap to homeowner right after graduation, especially if they avoided taking out student loans, worked while attending college and were able to simultaneously save for a down payment. If that sounds like a high hurdle – it is. Few new college graduates can manage getting through four years of college without taking on any debt.

But buying a home is an important long-term financial move, so you’d better get ready. When it’s time to start looking, make sure you save up for the down payment and stick to your budget as you search for the perfect home.

And don’t necessarily listen to how much the lender says you can afford to buy. Lenders may approve you for an amount you can’t really afford and you’ll find yourself struggling to keep up with all of your payments. Which is no way to live.

More on Housing Costs:

Is the American Dream Out of Reach?

Don’t Have a Mortgage? It’s Unlikely You’ll Get One

Who Qualifies for Subsidized Housing?

Real Estate Challenges and Opportunities for 2019

Disturbing Real Estate Trends to Watch Out for in 2019

Which Housing Market is the Biggest Real Estate Bubble?