As long as he was working on his education, I'd have no problem with him living at home. However your son is in a position where he is not not able to make it on his own, but at the same time the longer he waits the harder it will be.
In the short term, I would recommend you help him find a part time job. Just working, much less making money will help with his depression.
Though some might say "college isn't for everyone", I believe he has handicapped himself badly. By now he could be well into his senior year of a 4 year degree or possibly just finishing and starting in a career he'd love. He should look at enrolling in a local community college. Nothing fancy, but this way he will have something.
You should look at ways to motivate him to want to work / move out. Does he own his own car? Is he paying for the gas? If not he best invest in a good pair of shoes until he can afford to do so himself.
How about cutting off the internet or disconnecting it from his room. If he wants it, he needs to pay for it.
Once he does get a job, if college isn't in his future, then it would be time to look into an appartment. Something cheap and with in his budget.
Also as long as he is in YOUR house, he follows YOUR rules. This might include things like eatting at the table with the family, or not eatting at all.
Lastly you need to support him emotionally anyway you can, but continuing to support him financially will do nothing but make his life worse.
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