"Hij vertelde me dat hij in het huis van zijn ouders was blijven wonen."
Translation:He told me that he had continued to live in his parents' house.
"He told me that he had stayed living at his parents' house" is fine (British) English and should be accepted, in my opinion.
It is accepted (now - I don't know if it was a week ago) but frustratingly marks the possessive apostrophe as a typo. There is no direct way of reporting this, except to file an independent bug report, since "my answer should be accepted" is not an option, where your answer was accepted, but wrongly said to contain a typo. :(
There's a report button (the flag) under each sentence which can be used the report issues with a sentence or to report an alternative translation.
It doesn't seem to like parents' with the apostrophe after the s and says it is a typo. Unfortunately as it is only a typo it is not allowing me to report it.
It's a bug. Take a screenshot and file a report here: https://support.duolingo.com/hc/en-us/requests/new
When you use the word bank format for this exercise, the apostrophe after parents is missing.
Why is this not correct? : "He told me that he kept living in the house of his parents."
Wrong tense. "... was blijven wonen." is past tense. So, "... he had kept living in the house of his parents" is correct.