You stated: “People do it because they're financially distressed (relative to their locality). They can't both live alone and save money comfortably.”

This is false for software engineers in the Bay Area. Can they save more by living with roommates? Sure.

But they wouldn’t be “financially distressed” or “unable to save money comfortably” if they didn’t - that is easily verified by looking up new grad salaries and rents in the Bay Area.

It’s simply a rational decision - these are people who were living with roommates in college and by continuing that arrangement can save more, live in a better location w/ more amenities, and quite often share a place with friends - win/win/win.

> It’s simply a rational decision - these are people who were living with roommates in college and by continuing that arrangement can save more, live in a better location w/ more amenities, and quite often share a place with friends - win/win/win.

That's true everywhere. Yet the overwhelming majority choose not to have roommates.

There's selection bias in your analysis. People who are attracted to big cities are more likely to enjoy the company of living with other people, and vice versa.