Millennials Are Now Wealthier Than Generations Before at the Same Age
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Here's your Money Briefing for Friday, August 16th. I'm Arianna Espudu for The Wall Street Journal, filling in for J.R. Whelan. Millennials were once seen as a generation always playing catch-up, behind on building wealth, getting married, and having kids. But now millennials are wealthier than previous generations were at their age. And the turnaround has been so dramatic that they can't believe it either.
There's this feeling maybe that it could disappear. And that's a really potent and scary feeling for people who, during their formative years, witnessed the Great Recession. And so even if many people in this generation have been very successful, there still is that sensation of looking over their shoulder and sort of waiting to see the next thing that happens.
Wall Street Journal personal finance reporter Joe Pinsker joins me after the break.
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Millennials are now wealthier than previous generations were at their age. WSJ personal finance reporter Joe Pinsker joins me to talk about it. So, Joe, are millennials popping champagne here? Like, just how much of a turnaround is this?
How did millennials go from falling behind to being wealthier than past generations at the same age?
It's a pretty big one. For a long stretch of their adulthoods, millennials have been behind where we would expect a generation to be at their age financially. But lately, that has turned around. The median household net worth of older millennials was about $60,000 in 2019. And three years later, in 2022, it had more than doubled to $130,000, according to the St. Louis Fed. And the turnaround for the generation has been so big that if you look at millennials along with some older members of Gen Z, that group of adults was 25% wealthier at the beginning of this year than Gen Xers and Baby Booners were in the past when they were a similar age. Are they popping champagne is maybe a different question that we can kind of get to.
This is a generation with a lot of economic scars and memories of tough times. So that's a bit more mixed.
And why were millennials in such a bad financial situation before?
It really is a mix of things. For many older millennials, it was about having a pretty rocky start and finishing their schooling in the Great Recession or the wake of the Great Recession. For many younger ones, it was sort of being unable to afford a home and feeling like they couldn't get ahead. But whatever part of the generation you look at, their experience really shows just how important the macroeconomic conditions are when you're just setting out financially as an adult.
We're talking about overall wealth here, so it's not just money in a bank account or money in their savings account. What are some of the ways that millennials have built it?
Housing really is the biggest one and that has been driving this effect. If you look over the past four years, millennials' housing wealth grew by $2.5 trillion annually. even after accounting for the additional mortgage debt that they took on during that time. Obviously, it's not news that home prices have soared in the past few years. But basically, if you were a millennial who managed to buy a home, you benefited greatly from that, whether you were somebody who managed to scrape together a down payment in the early 2010s, or if you just sort of snuck in to the market more recently before prices went up.
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