How millennials made $5 trillion in 2 years
Millennials are twice as rich as they were before the pandemic.
Why it matters: The recession arrived when millennials — anybody born between 1981 and 1996 — were feeling burned out and doomed. Student loans were stretching as far as the eye can see, and millennial wealth was just a fraction of what previous generations had managed to accumulate at the same age.
- The pandemic changed everything. Student loans payments were paused, government stimulus checks started pouring in, the stock market soared, and house prices spiked.
Where it stands: Millennials had an average of $127,793 in net worth in the first quarter of 2022.
- When Boomers were the same age, in 1989, their net worth (in 2022 dollars) was a comparable $136,786, according to Kali McFadden, a data research manager at LendingTree.
The catch: While millennials' wealth has risen very quickly in percentage terms, it's still tiny compared to other generations in absolute terms. While millennials gained $4.8 trillion of wealth in two years, Generation X gained $16.4 trillion, and now have some $42 trillion in total.
Context: One of the key reasons that millennials saw their wealth rise so quickly during the pandemic is that they started their home-buying spurt just in time.
- Between 2016 and 2022, millennial homeownership soared from 36% to more than 51%.
By the numbers: Recent first-time homebuyers tend to be the most leveraged, magnifying returns in up markets.
- If you put down a 10% downpayment, and your house goes up in value by 50%, then the equity you have in your home goes up by six times.
The bottom line: Many millennials got onto the housing ladder just in time.