Millennials have been able to shed the “broke generation” stereotype as household wealth among Americans under the age of 40 has grown significantly. A Center for American Progress analysis of Federal Reserve data shows that between 2019 and 2023, the average net worth of households headed by individuals under 40 increased by 49%. This includes most millennials, who are currently between the ages of 28 to 43, as well as some Gen Zers, who are in their teens to early 20s. By the end of 2019, the average net worth was around $174,000, but by the end of 2023, it had grown to $259,000.
Despite facing struggles such as purchasing homes, paying off student debt, and saving for retirement, millennials seem to be catching up financially as they enter their mid-30s. A strong stock market has played a significant role in boosting their wealth, with average values of various assets growing between 2019 and 2023. Housing wealth, liquid assets, personal business value, assets, and durable goods have all seen increases, contributing to the overall rise in net worth. Additionally, non-housing debt, including credit card balances and student loans, decreased by $5,000 on average, helping further boost millennials’ wealth.
Growing home values have been a significant factor in the wealth increase for under-40 homeowners. Census Bureau data shows that the homeownership rate among individuals under 40 grew by an average of 1.5 percentage points between 2019 and 2023. While the pandemic initially triggered a sharp recession and market decline, government intervention helped prevent a prolonged economic downturn. Millennials have rebounded faster and stronger from the Covid-19 recession compared to older generations during previous recessions, with their wealth increasing by around 101% between the end of 2019 and 2023, after adjusting for inflation.
The Covid-19 recession, which officially lasted just two months, was shorter than previous recessions in 1990 and 2007. This may have contributed to millennials’ wealth bouncing back significantly. In comparison, baby boomers saw a wealth increase of 46% four years after the 1990 recession, while Gen Xers saw a growth of only 4% four years after the Great Recession in 2007. The rapid recovery of consumer wealth during the Covid-19 recession has been unexpected, with millennials benefiting from government support and a quicker economic turnaround.
Young adults have also benefited from effects of the pandemic such as the student loan payment pause and canceled travel and entertainment expenses, which allowed them to pay down debt and boost cash savings. The surge in wealth among millennials and young adults is a combination of factors, including growing home values, asset value increases, and decreases in non-housing debt. Despite facing financial challenges in the past, millennials now seem to be on a positive trajectory towards financial stability and success, with their wealth increasing significantly over the past few years.
