Millennials: Late to the Party, Right on Time for the Economy
Millennials have suffered, or perhaps provoked, the ire of their elders for how slowly they have matured. The largest generation in American history—84.7 million versus 79 million when the Baby Boomers’ were in their 20s and 30s—has rewritten the playbook for adulthood. As of yet, Millennials have delayed embracing marriage, parenthood, and homeownership due in part to their financial hardships. Entering adulthood in the midst of the least robust economic recovery in American history and saddled with college debt, Millennials are the product of the environment in which they were raised. But, that environment is changing. As the economy recovers, wages grow, and college debt is paid off or forgiven, Millennials are increasingly likely to turn the corner towards adulthood. Recent studies bear out this thesis:
- Marriage: A 2015 Allstate/National Journal poll revealed that two-thirds of Millennials believe marriage is relevant. 73% of Millennials believe one should wait to get married until they are financially stable, explaining the delay in marriage.
- Parenthood: A report by the National Center for Health Statistics revealed that while births per capita are at an all-time low, the absolute number of births is on par with the post-WWII baby boom. The report also noted that the birth rate for teenage mothers is at an all-time low and that the birth rate for unwed mothers is 15% below its 2007 peak, meaning fewer children potentially born into poverty.
- Homeownership: The rate of homeownership in the U.S. has been in steady decline since the Great Recession. The financial burden of homeownership and the psychological shock of a housing-based recession have weighed on homeownership rates, but that may be about to change. National homebuilders are turning their focus from luxury homes to more-affordable homes as a shortage of entry-level homes persists, and a 2015 study by the National Association of Realtors and Portland State University showed 42% of millennials want to live in a conventional suburban home. Hence, we could have titled this article “Get Off My Lawn, You Kids! And Buy Your Own!”
- Savings: A 2016 study by Bankrate.com indicated that a higher percentage of Millennials (86%) were saving some of their income, higher than for any other age group. Savings translate into the financial stability Millennials are seeking before they make the above major life commitments.
Millennials are reaching an inflection point; they’re employed, accumulating wealth, and putting the Great Recession behind them. In doing so, they will grow the economy, becoming more voracious consumers like the generations before them as they grow into true adulthood. Be it buying a new home or a crib, Millennials are taking up the mantle of maturity the only way Millennials know how: in their own unique way and without regard for tradition.