Millennials Are Wealthier Than Other Generations Were at Their Age: See How They Did It

Millennial Marissa Jannetti got into the housing market at the perfect time.

In 2018, Jannetti and her husband were just starting their careers. They didn’t want to rent anymore, yet they didn’t have a big budget for a house. They crunched the numbers and learned that if they took out an FHA loan, which required only a 3.5% down payment, they might be able to afford a home of their own.

Soon, Jannetti was touring a charming four-bedroom condo in Orange County, CA, that she knew was The One. It was listed for just over $430,000, the tippy top of their budget. Despite their reservations, they made an offer—and it was accepted.

They got a good mortgage rate at the time, 4.25%, but with homeowners association fees and private mortgage insurance (which is required with an FHA loan), the couple had to budget carefully.

“We were pretty house-broke for a while,” Jannetti explains. “We didn’t go out. We made meals at home.”

She admits it was hard to scrimp and save to make their mortgage payment, especially when their friends were paying nearly half of that to rent similar homes.

But in 2020 when mortgage rates plummeted, the pair refinanced, getting out of the FHA loan and dropping their rate to 3.15%. This enabled them to lower their costs by about about $1,000 per month.

At the time, the housing market was quickly changing. Prices were going up, and Jannetti soon realized she was paying less than her friends who were still renting. Plus, she and her husband had built up some sizable home equity. They’d been living frugally for years—but now, they were sitting pretty.

And Jannetti isn’t alone: Data from the Federal Reserve Bank of St. Louis says that millennials such as Jannetti and her husband (those born between 1981 and 1996) have seen a recent rise in wealth.

The data found that the median household net worth of older millennials (born in the ’80s) more than doubled from $60,000 in 2019 to $130,000 in 2022. The St. Louis Fed also found that in early 2024, millennials and older Gen Z-ers had, on average and adjusting for inflation, approximately 25% more wealth than the previous two generations had at about the same age.

And it seems millennials have the housing market to thank: Those who were able to buy a home saw a sharp increase in equity during the COVID-19 pandemic years. But this often comes with some belt-tightening of their budgets to make that happen.

“Younger households tend to have a greater share of their wealth tied up in real estate, and although millennials are aging, they’re still house-rich relative to other generations,” says Realtor.com® Chief Economist Danielle Hale. “In the second quarter of 2024, real estate made up 42% of millennial assets compared to 30% for Gen X, 24% for boomers, and 23% for the Silent Generation.”

But the upside to this is that the price run-up during the pandemic affected millennials even more than other generations.

“Younger households’ net worth is disproportionately affected by housing market trends,” Hale continues. “Put another way, in aggregate, millennial wealth is benefiting from high home values.”

Jonathan Spears, a Florida real estate agent and the founder of Spears Group at Compass, agrees that those millennials who were able to buy a home before the pandemic were rewarded with a lot of equity in a short period of time.

“The ones that did invest [in real estate] were able to grow their wealth exponentially,” he says. “The last five years was maybe one of the greatest time frames in the United States history for wealth accumulation and growth.”

Why millennials are staying put longer than planned

While Jannetti’s home value has increased, so have other homes.

Jannetti references the popular “golden handcuffs” problem: Today’s homeowners are likely enjoying a monthly mortgage payment with a relatively low rate—so if they want to move, they’re facing much higher monthly costs.

“When we bought the condo, we thought, ‘OK, we’ll be here three years, tops. I didn’t want to have kids in that house because there was no yard,” she says. “And then here we are, six years later. We have a son, and no plans to leave. Moving to a home with a yard could mean doubling our monthly costs, or more.”

Still, Richard Redmond, founder of Redmond Mortgage Capital, says that most millennial homeowners are in a good place financially and should be proud of their investment. Many buyers from 2020 or before probably have a low interest rate, and by now, a good amount of equity.

“What could have been a better investment? Perhaps Bitcoin or Tesla, but realistically, real estate has been a really good, safe bet,” he says.

Spears agrees, saying that buying property is one of the best long-term investments.

“If you want to create wealth, wealth is created through assets,” he says. “And real estate, in my opinion, is the greatest asset vehicle to do so.”

It’s a long-term game, he adds. “Real estate is meant to be a hedge for long-term wealth, not necessarily a buy, sell, buy, sell, buy, sell.”

Is there hope for millennials who aren’t yet homeowners?

All of this is good news for people like Jannetti, who are already homeowners. But what about the millennials (and people in other generations) who haven’t bought a home?

Spears says it’s not too late and encourages people to get into the market as soon as possible.

“The best time was yesterday,” he says. “The reality of renting is that you’re essentially putting your money in somebody else’s pocket in exchange for shelter, so you’re never actually building wealth.”

Home prices can seem daunting, he admits, and rates are high now. But this shouldn’t scare off hopeful buyers.

Spears references a practice popularly referred to as “dating the rate” where a buyer agrees to a mortgage rate and, when rates drop, refinances.

There’s actually a benefit to investing now—when rates are high—because there’s likely less competition and buyers have plenty of negotiating power.