Feb 5, 2020 - Economy & Business

Millennials' housing anxieties

Illustration: Sarah Grillo/Axios

A majority of millennials feel behind financially and are not optimistic about their financial future, according to a new survey from Bank of America.

Why it matters: Millennials are nearly twice as likely as baby boomers to worry often about their finances. Homeownership tops the list of anxieties — 20% say not being able to afford a home is the top financial stressor.

Of millennials with savings, 32% are saving to buy a first or different home.

  • Younger generations prioritize homeownership even more: 41% of Gen Z and 40% of younger millennials are saving to buy a home.

Yes, but: Debt is a big hurdle. Excluding home loans, 16% of millennials owe $50,000 or more. 42% say debt is keeping them from buying a first or nicer home.

That's forcing a practical mindset, per the survey.

  • 82% would rather buy a smaller, more affordable home.
  • Single millennials are more likely to choose to fund a down payment on a home (82%) over having their dream wedding (12%).
  • When asked what they would be most likely to do with a $10,000 windfall, 40% would pay down debt, with 20% saying they'd put it toward a new home or invest in their current home.

One surprising thing: One-quarter of millennials have at least $100,000 in savings, which is a 16% increase from two years ago, per the survey.

Go deeper: Millennials are re-landscaping the housing market

Go deeper

U.S. household debt tops $14 trillion for first time

Illustration: Sara Grillo

Household debt increased by more than $600 billion last year, topping $14 trillion for the first time and marking the largest one-year jump since 2007, new data from the New York Fed show.

Why now? The growth was driven mainly by a large increase in mortgage debt balances, which rose by $433 billion.

Record low rates could exacerbate debt, housing issues

Illustration: Rebecca Zisser

The stock market selloff has drawn the most attention this week, but moves in the U.S. government debt market will likely have much more important impacts on the economy.

The state of play: Mass bond buying has taken place since the beginning of the year and picked up steam as headlines about the spread of novel coronavirus have grown more worrisome.

Companies are behaving like it's a recession

Illustration: Aïda Amer/Axios

Despite historically low interest rates, U.S. companies are being unusually frugal, holding back on issuing new debt and pumping up their balance sheets with cash.

Why it matters: Historically, when interest rates are low and the economy is strong, companies have levered up to increase capital expenditures and buy assets in order to expand. The opposite is happening now.