Some Millennials have doubled their wealth in the last 4 years

Marina Demeshko/iStock, Tyler Le/BI

• Some millennials suddenly experience a financial breakthrough.
• Those with growing wealth can draw on a unique set of economic circumstances over the past few years.
• This means some feel more confident about their retirement or have been able to purchase a new home.

James Barnes is surprised to find himself beating the millennial odds.

At 33, he is firmly in the middle of the generational cohort born from 1981 to 1996. By some accounts, they cut out staples like towels and cereal and spent too much money on avocado toast and fancy coffee. Many began their careers in the aftermath of the Great Recession, faced a housing affordability crisis throughout their adult lives, and generally seemed be condemned to economic misery.

Before the pandemic, Barnes’ situation was closer to that traditional millennial image. In his early twenties, Barnes and his wife lived with his parents. She went into business and worked with a managed services provider for assisted living facilities as they steadily paid off their student loans and saved for their own home.

“You’re just starting and graduating from college, you’re saddled with student debt, you’re living in an apartment you’re paying rent for, you’re not building any net worth, you’re generally not making that much money. “money you thought you’d get right out of college,” Barnes said. “So even looking at the price of a $150,000 house, you wonder: When will that ever happen?”

In 2017, it finally happened for the Barnes. They put a down payment on a house in Lawrenceville, Georgia. Barnes said it was just regular, normal life: They commuted to Atlanta for work, hung out with friends, worked on home renovations, enjoyed being DINKs and took care of their pet bearded dragon. They weren’t struggling, but they always watched their budget and spent prudently.

Courtesy of James Barnes

When the pandemic hit, Barnes’ wife stepped up her very millennial hobby: browsing real estate and visiting open houses. She discovered they were sitting on a gold mine: the value of their house had doubled.

This prompted a strategic life change. The couple decided to sell up and return to Barnes’ home state of Alabama. When a real estate company offered $300,000, double what the couple had paid, they jumped at it.

“I know it’s a very strange scenario for most millennials and for most people, but we sold a house and just bought a house,” he said.

The Barnes are part of a new millennial group who are suddenly doing very well financially, especially if they purchased real estate before the pandemic. As of the fourth quarter of 2019, millennials held $3.5 trillion in real estate wealth; in the fourth quarter of 2023, this figure more than doubled.

After an adult life plagued by economic difficulties, the pandemic has caused a pause in student loan payments, increase in wages, increase in real estate and stock holdings and government stimulus measures. All of this has helped change the fortunes of some millennials. While all this is not enough to support an entire generation struggling with a high cost of living, a lucky few managed to nab the golden egg.

Double wealth in just a few years

While many millennials are approaching an age typically associated with peak years of income and homeownership, they were lagging behind pre-pandemic: At the start of 2020, millennials owned 4% of the country’s real estate value; at the same age, baby boomers held 32%.

But now things are getting better. More than half of millennials now own their home — up from 43% in 2019 — and, starting in 2022, the average pre-tax millennial household income was $100,315, up from $79,514 in 2019.

Khary, an elderly millennial parent of two who works in tech consulting, weathered his generation’s classic economic double whammy: The Navy veteran said he was laid off in 2008 and initially of the pandemic, he had about $40,000 in student debt combined between him and his wife.

“I felt like I had lost about four or five years of progress trying to build up my savings and plan for the future,” he said. Khary and other millennials BI spoke with asked to be called only by their first names for privacy reasons.

When the pandemic hit, Khary suddenly felt some relief. Between the student loan break, stimulus checks, a pay raise and a robust stock market, he doubled his investment savings and was able to max out his retirement accounts, according to documentation seen by BI. He’s still paying off his student loans, but says his payments are now much easier to make.

And it’s in sight of something Americans of all generations covet: a comfortable retirement. He said his early-career layoff cost him a few years to build up his savings and plan ahead.

“The pandemic really helped close that gap and helped me get back what I had lost,” he said.

Many people of his generation can relate. The average wealth of millennials has doubled between 2019 and 2023, according to an analysis by the Center for American Progress. Similarly, the real median net worth of Americans under 35 increased by 143% between 2019 and 2022.

The most striking thing about the sudden increase in millennials’ wealth: It dwarfs the progress of previous generations who experienced a recession during their young adult years.

For example, the real wealth of Generation followed the 1990 recession. Millennials beat them all, and then some.

The pause on student loan payments and relief programs put in place by President Joe Biden have been game-changers for millennials. Millennials holding debt averaged $40,614 in 2023. The Biden administration has reduced some of America’s student debt, forgiving nearly $160 billion so far through debt adjustments. accounts, fraudulent restitutions and clearing a backlog of requests for large debts. pardon programs like the one for people who work in the public service.

Amanda, a millennial mom in Texas who works in the tech industry, never repaid her loans. Since she didn’t go straight to college after graduating from high school, she earned her college degree during the pandemic break.

The break eased some concerns about her financial prospects after graduation. She said she felt her degree was completely useless. Her school also didn’t offer the employment assistance it promised. But it all worked out for Amanda in the end; just two weeks after she and her husband bought a house together in 2023, she discovered that her $80,000 loan balance had been forgiven. In total, Amanda and her family have more than doubled their income since the start of the pandemic; she now makes around $100,000.

“I came from a very poor situation and I was determined that my child would not live the same way as me,” she said.

Some anxiety – but more stability

The pandemic has not upended the financial situation of all millennials. Rising wealth has fueled the generation’s class divide because it has left some behind — after all, many millennials still live paycheck to paycheck.

“Many millennials are doing worse than their parents,” Rob Gruijters, a lecturer at the University of Cambridge and co-author of a recent paper on the growing wealth gap among millennials, told BI.

“The discourse tends to increase inequality, and there are losers and winners,” he said. “So there are people who are at the top of the distribution, they benefit from the increase in inequality, and then there are quite a large number of people who lose out in that situation.”

One way the high-end is getting richer while lower-income millennials are still struggling is through investing in the stock market. Stock values ​​have soared in recent years, with the S&P 500 soaring after the initial shock of the pandemic and still hitting record highs; however, the richest 10% of Americans own about 93% of stocks.

Still, low-income Americans are most likely to have benefited from post-pandemic wage hikes driven by labor shortages in some sectors. Research has shown that wage growth at the bottom of the income scale has helped counteract the effects of decades of wage inequality and has even reduced the student wage premium.

Yet even some millennials who have seen their lot improve are worried about the future. They are hyper aware of how quickly things can change.

“I know I’m coping much better than other people my age, but there’s still a lot of anxiety: if there’s another pandemic, if something crazy happens, if we lose our job, how are we going to pay the bills?” » said Amandine.

For Caitlin de Oliveira, 34, the pandemic surge is nothing as drastic as doubling her household income or buying a new house. Instead, stimulus measures – including monthly child tax credit checks in 2021 – allowed his family to to gain a financial foothold.

Courtesy of Caitlin de Oliveira

Between their growing savings and gains from a robust stock market, their 401(k) grew to just under $85,000, up from about $20,000 in 2019. That means she was able to be safe that they are on the right track to being able to retire in a good place.

“Just knowing that is so comforting,” she said. She said she doesn’t think millennials are as financially “stupid” as people say – “a lot of us are really trying – it’s just been difficult.”

In the past, Khary said, millennials had faced crises and simply complained. But not this time.

“As millennials, I think we felt prepared and it proved that we had been through quite a bit and we kind of learned from it,” he said. “It’s kind of given us the confidence that we can actually handle what’s ahead of us if there are further crises.”

Are you a millennial whose finances have improved significantly in recent years? Contact this journalist at jkaplan@businessinsider.com.