The wealth of some Millennials doubled in the last 4 years


Marina Demeshko/iStock, Tyler Lay/BI

  • Some of the Millennial generation are suddenly taking off financially.
  • Those with rising fortunes can thank the unique economic conditions in recent years.
  • This means some people felt more confident about retirement, or were able to buy new homes straight away.

James Barnes Millennials are amazed to find themselves beating the odds.

At 33, he stands firmly in the middle of the generational group born from 1981 to 1996. According to some accounts, he eliminated staple foods like napkins and cereal and spent too much money on avocado toast and fancy coffee. Many began their careers after the Great Recession, grappled with the housing affordability crisis throughout adulthood, and generally felt Be doomed to financial ruin.

Before the pandemic, Barnes' position was closer to that traditional millennial image. In his early 20s, Barnes and his wife lived with his parents. She went corporate and worked with a managed services provider for assisted living facilities as she steadily paid off her student loans and saved for her own home.

“Just starting college and graduating, you're burdened with student loans, you're living in an apartment that you're paying rent for, you're not building any equity, you're not making as much money as you normally would.” Not earning as much as you thought you would coming out of the college gate,” Barnes said. “So even looking at a $150,000 price for a house, you're like, when is that going to happen?”

It finally happened in 2017 For Barneys. He made a down payment for a house in Lawrenceville, Georgia. Barnes said it was just a regular, normal life: They commuted to Atlanta for work, hung out with friends, worked on home improvements, enjoyed being DINKs, and loved their pet bearded dragon. Used to take care. They weren't struggling, but they always kept an eye on their budget and spent wisely.

James Barnes and his wife.
Courtesy of James Barnes

When the pandemic hit, Barnes' wife intensified her millennial hobby: studying real estate and visiting open houses. He discovered they were sitting on a gold mine – the value of their house had doubled.

This prompted a strategic life move. The couple decided to sell up and move back to Barnes' home state of Alabama. When a real estate company offered $300,000, double the amount the couple had paid, they accepted.

“I know this is a very strange scenario for most millennials and really most people, but we sold a house and basically bought a house,” he said.

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The Barneys are part of a new millennial group that is suddenly doing very well financially — especially if they bought real estate before the pandemic. In the fourth quarter of 2019, Millennials held $3.5 trillion of real estate wealth; By the fourth quarter of 2023, it will more than double.

After an adulthood plagued by economic crises, the pandemic brought a A pause in student-loan payments, rising salaries, increased real estate and stock holdings, and government stimulus. All this helped change the fortunes of some millennials. while that's all Not enough to raise an entire generation struggling with high living costs, a lucky few managed to acquire a golden egg.

Wealth will double in a few years

While many Millennials are approaching the age typically associated with peak earning and homeownership years, they were lagging pre-pandemic: At the start of 2020, Millennials had the nation's real estate values owned 4%; At the same age, baby boomers owned 32%.

However, things are looking good now. More than half of the Millennial generation now own their own homes – up from 43% in 2019 – and, by 2022, the average pre-tax home of the Millennial generation is Income was $100,315, up from $79,514 in 2019.

Khari, an elderly parent of two who works in technology consulting, faced the classic economic double blow of his generation: The Navy veteran said he was laid off from his job in 2008 and, in the pandemic Upon leaving, he and I had approximately $40,000 in combined student loan debt between them. His life partner.

“I felt like I lost about four or five years of progress trying to build up my savings and plan ahead for the future,” he said. Khari and other Millennials were asked by BI to provide only first names over privacy concerns.

When the pandemic hit, Khairi suddenly got some relief. Between the freeze on student loans, stimulus checks, pay raises and a strong stock market, they doubled their investment savings and were able to max out their retirement accounts, according to the document seen by BI. He's still paying off student loans but said it's much easier to pay off now.

And he has in sight the thing desired by Americans of all generations: a comfortable retirement. He said that after losing his job early in his career, it took him a few years to increase his savings and plan ahead.

“The pandemic really helped bridge that gap and get back what I had lost,” he said.

Many people of his generation can relate to this. Average millennial wealth doubled Between 2019 and 2023, according to an analysis by the Center for American Progress. Similarly, the real average net worth for Americans under 35 increased 143% from 2019 to 2022.

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What's most striking about the Millennial generation's sudden increase in wealth is that it dwarfs the progress of previous generations, who experienced a recession during their young adult years.

For example, Gen Xers' real wealth grew only 4% in the four years following the Great Recession of 2007. The real wealth of Baby Boomers increased by 46% in the four years following the 1990 recession. Millennials left them all behind and then some.

A game changer for Millennials was the pause on student-loan payments and the subsequent relief programs introduced by President Joe Biden. By 2023, Millennials had an average debt of $40,614. The Biden administration is easing some of America's student loan burden, forgiving about $160 billion so far through account adjustment, fraud reinstatement and clearing the backlog of applications for prime loans. The pardon program is the same for people who work in public service.

Amanda, a millennial parent from Texas who works in the tech sector, never made any payments on her loan. Since she did not go to college directly after graduating from high school, she graduated from college during the pandemic.

The break eased some concerns over her financial prospects after graduation. He said he felt his degree was completely useless. His school also did not provide any job assistance that it had promised. But, it all worked out for Amanda; Just two weeks after she and her husband bought a house together in 2023, He learned that his $80,000 loan had been forgiven. Overall, Amanda and her family's income has more than doubled since the start of the pandemic; She is currently earning around $100,000.

She said, “I came from very bad circumstances and I was determined that my child would not be able to live like me.”

Some Anxiety – But More Stability

The pandemic didn't change every millennial's financial situation. The rise in wealth has exacerbated the generational class divide as it has left some behind – after all, many Millennials still live paycheck to paycheck.

“Many millennials are performing worse than their parents,” Rob Gruyters, a lecturer at the University of Cambridge and co-author of a recent paper on the growing millennial wealth gap, told BI.

“The narrative is increasing inequality, and there are both losers and winners,” he said. “So there are people who are at the top of the distribution who benefit from increases in inequality, and then there are a considerable number of people who are losing out in that situation.”

In a way the top class is getting rich while the low income millennials are still struggling through investing in the stock market. Stock values ​​have skyrocketed over the past few years, with the S&P 500 rising after the initial pandemic shock and still hitting record highs; However, the top 10% of Americans own about 93% of stocks.

Still, low-income Americans were most likely to benefit from wage increases after the pandemic due to labor shortages in some industries. Research has found that wage growth at the bottom of the income distribution helped offset the effects of decades of wage inequality and even reduced the college wage premium.

Still, some Millennials who have seen their situation improve are also worried about the future. They are unaware of how quickly things can change.

“I know I'm doing a lot better than other people my age, but there's still a lot of worry that if another pandemic comes, if anything weird happens, if we lose our jobs, How will we pay the bills?” Amanda said.

For Caitlin de Oliveira, 34, the pandemic boost hasn't meant big changes like doubling her household income or buying a new home. Instead, stimulus measures – including monthly child tax credit checks in 2021 – meant her family was able To achieve financial position.

Caitlin de Oliveira and her family.
Courtesy of Caitlin de Oliveira

Between growing his savings and benefiting from a strong stock market, his 401(k) has grown to just under $85,000 — up from about $20,000 in 2019. This means that he or she is able to feel confident that they are on the path to being able to do so. Retire in a nice place.

“Just knowing that is very comforting,” she said. He said he doesn't think Millennials are as financially “stupid” as people say – “A lot of us are really trying – it's very hard.”

In the past, Millennials have faced crises and just complained, Khari said. But not this time.

“As the Millennial generation, I think we felt prepared and it proved that we've been through a lot and we've learned from it to some extent,” he said. “It gave us a sense of confidence that if another crisis came up, we could really handle whatever situation came up on the road.”

Are you a young person whose financial situation has improved significantly in the last few years? Contact this correspondent [email protected],

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