Millions of young adults who moved back with their parents thisyear could lead to an estimated $726 million in lost rent,according to a Zillow analysis, which noted that the ripple effects"could have far-reaching consequences for the housing market."

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Amid high U.S. unemployment in the coronavirus pandemic, thenumber of adults living in a parent's or grandparent's home grew bymore than 2.7 million in March and April, said Zillow, adding that the vast majority of thosewho moved home — about 2.2 million — are from Generation Z and arebetween 18 and 25 years old.

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Zillow said the 2.2 million Gen Zers represent anestimated $726 million in rent payments eachmonth — about 1.4% of the rental market at risk. "It is highlyunlikely that all leases will be broken and this full amount wouldgo unpaid, but it serves as a gauge of the potential impact onhousing," the Thursday report said.

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What happens next to this population could impact the housingmarket's near future, the report said. For instance, if jobs arepermanently lost or slower to recover than expected, that couldfree up many rental units and drive down prices.

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Even before the pandemic, the number of adults living with theirparents was high after the last financial crisis, as millennialsflocked to the basements and spare bedrooms of Baby Boomers.

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"Now, it's Gen Z's turn to ride out today's crisis amid massiveunemployment," Zillow Senior Principal Economist SkylarOlsen, was quoted as saying. "But this time, rents are more likelyto slow, easing the path to returning to living on their own evenif some under-employment persists."

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As apartment construction has exceeded "historic norms" inrecent years, Olsen said, some young adults are likely to double upor live more affordably in various ways, which should soften rentgrowth.

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Meanwhile, living with parents rent-free, and staying even afterjobs return, could allow some Gen Zers to save enough forhomeownership more quickly or may even delay their parents fromdownsizing into a smaller home, Zillow noted.

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Cities with a higher share of young renters may see adisproportionate impact. Thisincludes Austin, KansasCity, Cincinnati and Pittsburgh, Zillowsaid. On the other end are areas with more millennials and olderrenters, including Miami, NewYork and Los Angeles, which each have less than1% of the rental market made up of young people who have movedhome, Zillow said.

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Christine Simmons

Christine Simmons writes about the New York legal community and the business of law. Email her at [email protected] and find her on Twitter @chlsimmons