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Report: Millennials have gained wealth faster than their parents did at same age

By Stephanie Weaver
Published  August 23, 2024 3:27pm CDT
Money
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The Brief

    • Household wealth for those under 40 in the U.S. grew 49% from its pre-pandemic level, a new report found.
    • Young households haven't seen wealth growth like this since the Federal Reserve first started tracking this data in 1989.
    • According to the center, this surge comes after decades of stagnant wealth for younger Americans.

New data shows that younger Americans have seen the strongest surge in inflation-adjusted wealth of any age group since the COVID-19 pandemic.

The study was conducted by The Center of American Progress, an independent, nonpartisan policy institute, using data by the Federal Reserve. 

The institute found that the average wealth of households under 40 years old was $259,000 in the fourth quarter of 2023 – a 49% increase since the 4th quarter of 2019, even after adjusting for inflation. 

Millennial household wealth more than doubled

Looking specifically at millennial households, or those born from 1981 to 1996, their inflation-adjusted wealth more than doubled during this period.

Millennials’ wealth increased by 101%, from the end of 2019 through the end of 2023. Earlier generations did not experience similar wealth gains during and after recessions when they were at a similar age. 

Wealth growth included an increase in average housing wealth and liquid assets, including stocks and bank accounts, and business assets. 

(File: Prostock-Studio / iStock / Getty Images Plus)

Average inflation-adjusted wealth fell 7% for households ages 40 to 54, rose 4% for households ages 55 to 69, and increased by 15% among households 70 and older over the same period.

In addition, earlier generations did not experience similar wealth gains during and after recessions when they were at a similar age. Generation X was 27 to 42 years old in 2007, when the Great Recession started. This group’s real wealth grew only 4% over the four-year time period. Meanwhile, Baby Boomers were 26 to 44 years old at the start of the recession in 1990 and saw their real wealth increase by 46% following that recession’s beginning in 1990.

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"Millennials weathered the pandemic recession much better financially and with an improved financial security outlook than Gen X and the Baby Boomers did when they experienced recessions at similar ages," the report stated.

This surge follows stagnant wealth growth

According to the center, this surge comes after decades of stagnant wealth for younger Americans, and such rapid inflation-adjusted wealth growth for young households has never occurred before in the wealth data, which goes back to 1989. 

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"This historic growth is without parallel in recent decades, indicating how the strong economy is paying off for young workers," the center wrote in its report. "Their households are enjoying strong income growth and more financial security for the future as a result of a uniquely strong and equitable economic recovery." 

The findings line up with a report by Pew Research Center which found that the wealth of U.S. households increased overall during the COVID-19 pandemic. According to the findings, the typical American household had a net worth of $128,200 in 2019. By 2021, this had increased 30% to $166,900.

The Source

  • The study was conducted by the Center of American Progress, an independent, nonpartisan policy institute, using data by the Federal Reserve between 2019 and 2023. The Federal Reserve started releasing Distributional Financial Accounts data in 2019.  This story was reported from Los Angeles.