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A parade of economic misfortunes has long left older millennials strapped with debt, the butt of society-wide jokes and struggling to afford homeownership — but the generation’s fate is now looking up, according to a new report.
“It turns out that millennials may not be as ‘lost’ as we once thought,” researchers at the Federal Reserve Bank of St. Louis wrote of their recent findings that those born in the 1980s are beginning to close the generational wealth gap between themselves and older Americans.
While in 2016 older millennials were 40% below wealth expectations for their age, by 2019 that number had shifted to just 11% below expectations. This is not terribly surprising, as “older families typically have more wealth than younger families,” so it makes historic sense that millennials are becoming more financially stable as they get older. Yet they are still generally worse off than some older generations. “[Younger] families in 2019 appeared to be less wealthy than their peers of similar ages in the past,” researchers wrote.
Still, the huge financial gains millennials — and Gen Xers — made between 2016 and 2019 are a cause for optimism. And, “the share of millennials and Gen Zers who have become homeowners is similar to that of previous generations when they were the same ages,” despite higher current entry-level home prices, and the factor of student loans. It also bodes well for younger millennials, born between 1990 and 1996, who researchers believe may have a “steeper wealth life cycle” and will take longer to reach the financial stability their older counterparts have due to being such a highly educated generation.
This positive outlook, however, is weighed on by the fact that older millennials are still 11% below expectations and now entering their 40s with the highest debt burden of any age demographic. Additionally, researchers emphasize that their findings are not reflective of the COVID-19 recession, which could be a “major headwind for millennials.”
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