Millennials are wealthier now than their parents were at same age in 'drastic' turnaround: report
'The turnaround has been so dramatic that millennials...now find themselves ahead.'
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Millennials are better financially positioned now than they were in previous generations, according to a new report.
The Wall Street Journal published an article Tuesday titled, "The Dramatic Turnaround in Millennials’ Finances," documenting the surprising change in fortune of a generation "once considered perpetually behind."
"Millennials are now wealthier than previous generations were at their age. They can’t believe it either," the Journal writes. "The turnaround has been so dramatic that millennials— mocked at times for being perpetually behind in building wealth, buying homes, getting married and having children—now find themselves ahead."
GEN Z LEANING ON CREDIT MORE THAN MILLENNIALS DID AND RACKING UP MORE DEBT
But despite the post-pandemic housing market and high interest rates, older millennials have caught up with previous generations when it comes to home ownership. (Justin Sullivan/Getty Images / Getty Images)
The generation, which spans from ages 27 to 44, is experiencing "swift" and sudden financial success, making a recent turnaround after many assumed their dreams of matching their parents' success at their same age were out of reach, according to the Journal.
Ana Hernández Kent, a millennial senior researcher at the St. Louis Fed told the Journal she spent her career examining whether her age group is indeed a "lost generation."
But, "They’re no longer lost," she told the outlet. "They’re found."
Public relations specialist Isabelle Novak and her partner software executive, Reid Gridley, both 27, pose for a portrait with their dog Freya outside their 1911 bungalow in Portland, OR which they closed on in January for $610,000. They represent a (Leah Nash For The Washington Post via Getty Images / Getty Images)
The combined wealth of millennials and older Gen Z totaled $13.2 trillion in the first quarter of 2024, the Journal reported, citing the Federal Reserve, The figure was a big leap from just $4.5 trillion in 2020, in large part due to real estate.
"The median household net worth of older millennials, born in the 1980s, rose to $130,000 in 2022 from $60,000 in 2019, according to inflation-adjusted data from the Federal Reserve Bank of St. Louis. Median wealth more than quadrupled to $41,000 for Americans born in the 1990s, which includes the generation’s youngest members, born in 1996," the Journal writes.
Stocks and mutual funds also contributed to the higher number, "in part because many employees made larger contributions to retirement accounts earlier in their careers," according to the article.
"It’s unclear if millennials are better off overall, given the outsize increases in some of the most burdensome costs, such as child care, housing and healthcare. They’re also projected to live longer than Boomers, so they’ll need to make their money last," the article warns.
"As a group, though, they have traits that point to long-term prosperity, economists say. More have college degrees, which boost income. And they are having fewer children, which, whatever the effects on the country, is a boon to budgets."
Millennials were said to be drastically lagging behind their parents when it came to homeownership. But despite the post-pandemic housing market and high interest rates, older millennials have caught up with previous generations. The number of millennials who owned homes rose to around 60% between 2019 and 2022, according to St. Louis Fed, as written in the Journal.
Some millennials are putting away significantly more money in their retirement funds.
"Millennials’ housing wealth grew $2.5 trillion, after accounting for the additional mortgage debt they took on. A colossal jump in home prices benefited owners, whether they scraped together a down payment in the early 2010s or squeaked in just before the recent leap in prices and rates," the Journal wrote.
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While retirement is not a primary concern for some, many millennials have been putting away significantly more money and aggressively investing in their future as their income grows.
According to Fidelity, millennials reportedly had an average 401(k) account balance of $59,800 in the first quarter of 2024, compared with $27,600 in 2019.
