Jul 30, 2022 - Economy & Business

How millennials made $5 trillion in 2 years

Data: The Federal Reserve; Chart: Kavya Beheraj/Axios

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.

  1. 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.

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