In a report released earlier this year, Urban Research Institute It confirmed what many already suspected: today’s American youth Living with parents longer than previous generations, Less likely to buy their own home When they divorce, they delay marriage and children and are less likely to accumulate substantial assets. savings.
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The average age at which young people leave home has risen from about 23 in the 1990s to 26 or 27 in the 2010s, according to a report from the Urban Institute. The percentage of young people who buy a home soon after leaving home has also been steadily declining.
another GOBankingRates 2024 Survey It found that about 30% of adults ages 18 to 44 have no savings at all. Nearly 40% have less than $50,000 saved, far less than financial experts recommend.
Cultural factors are influencing this trend. A joint survey conducted last year found that closeGeneration Lab and the Millennial Action Project investigated what the American Dream means to young people between the ages of 18 and 34.
One finding of the survey was that while marriage, home ownership and having children “are lower priorities than they once were,” young people ranked “being happy, fulfilled and having the freedom to make important life decisions” as important elements of the American Dream.
But economic factors are also at play. Here, many companies Generation Z Millennials are lagging behind in some milestones in life.
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inflation
The Baby Boomer generation Millennials And Gen Z kids will remember the double-digit inflation of the late 1970s and early 1980s that made it nearly impossible to get ahead financially. Similarly, young Americans today are seeing consumer prices rise to their highest in decades. Inflation has also affected home prices, which have reached an all-time high over the past two years, putting many Millennials and Gen Zers out of reach when it comes to buying a home.
Tighter lending standards
It’s also affecting young people’s ability to buy a home: After the financial crisis of the late 2000s, banks and other lenders raised the standards for eligibility and loan amounts. Mortgage interest rates Interest rates are much higher than they were a few years ago, making it even harder to get financing.
Student Loan Debt
Another factor is the heavy student loan debt burden that young people carry. Previously reported by GOBankingRatesAccording to a study by the Federal Reserve Bank of New York, student loan debt in the United States reached a “staggering” $1.7 trillion in 2020. Millions of young Americans enter adulthood with thousands of dollars in student loan debt, hindering their ability to build assets, buy a home, or start a family.
Stagnant wage growth
According to a recent report: Junior AchievementWith unemployment rates hovering near record lows and many employers desperately in need of workers, wages are currently not keeping up with inflation. The emergence of AI is also contributing to more jobs being replaced by machines. The gap between income growth and the rising cost of living is making it increasingly difficult for millennials and Gen Z to achieve economic advancement.
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This article was originally published on GOBankingRates.com: 4 economic factors that are delaying Gen Z and Millennials in achieving life milestones
