Younger Americans’ wealth growth has beaten historic norms
Under 40s have seen wealth accumulation rise faster than other generations.
Americans under 40 have seen their wealth accumulation far outpace that of older generations, and beat historic norms, since the start of the pandemic four years ago.
A new analysis of data from the Federal Reserve reveals that the average wealth of ‘under 40’ households was $259,000 in the fourth quarter of 2023, that’s a 49% increase in wealth since the fourth quarter of 2019, even after adjustment for inflation, or $85,000 on average.
The Center for American Progress research found that this is way ahead of the wealth growth for households those aged 55-69 (4%). The 40-54 age range saw their wealth fall by 7% during the 2019-2023 period.
Historically, younger age groups’ wealth has tended to fare worse following recessions, but this has not been the case this time.
Looking specifically at Millennials, who were aged 23-38 in 2019, their wealth more than doubled (101%) from the end of 2019 to the end of 2023. The analysis compares their gain with that of Gen X who were of similar ages during the Great Recession in 2007 but only saw their wealth rise 4% in the four years that followed.
And the good news for young Americans doesn’t stop there, as the analysis suggests that the wealth growth is not limited to a small number of people but is more widespread.
It has been driven by several key factors such as:
- average house wealth (value minus mortgage debt) which gained 22% in the analysis period
- pandemic relief payments, which helped a $9K boost for liquid assets
- one-person business ownership, which almost doubled from pre-pandemic levels, adding an average $10K to wealth
- financial assets, up $31K
- consumer durables added $7K
- non-housing debt, down $5K.
“Millennials have broken through decades of stagnation with historically rapid wealth growth, and this is because of the historic economic recovery after the COVID-19 pandemic recession,” said Brendan Duke, senior director of economic policy. “This rapid and broad-based wealth growth across various assets—whether that’s owning a house, liquid assets, owning a business, or decline in debts—is helping grow financial security and upward economic mobility for younger Americans.”
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