The difference in wealth can be partly attributed to differences in debt by generation. Compared with those who came earlier, more Millennials have outstanding student debt, and the amount of it they owe tends to be greater.
In fact, the share of young adult households with any student debt doubled from 1998 (when Gen Xers were between 20 to 35) to 2016 (when Millennials were that age).
In addition, the median amount of debt was nearly 50% greater for Millennials with outstanding student debt ($19,000) than for Gen X debt holders when they were young ($12,800).
Also, Millennials, who, again, were hit hard by the Great Recession, have been slower in forming their own households than previous generations.
They’re more likely to live in their parents’ homes and also more likely to be at home for long stretches.
In 2018, 15% of Millennials (ages 25 to 37) were living with their folks. This is nearly double the share of early Boomers and Silents (8% each) and 6 percentage points higher than Gen Xers who did so when they were the same age.
What’s more, millennials’ discretionary income is shrinking with inflation, Redfin finds. Even though their average income has increased 9.7% since 2020, rising costs for housing, food, and gas have increased their expenses by about 17%.
Rental costs have become particularly expensive, with median monthly rents up 13.5% year over year in July.
“This is a rough patch right now for millennials,” said Redfin senior economist Sheharyar Bokhari. “But their long-term prospect is that they will be making more money as they get older, get into ownership and become the main force driving the economy.”
