Most Americans believe today’s children will be poorer than their parents, Pew finds

Gen Z
  • The economy might finally be rebounding from the pandemic, but not for everyone.
  • A new Pew Research Center survey found that respondents think kids will be worse off than their parents.
  • Younger workers have already been hit by at least one recession and a pandemic.
  • See more stories on Insider’s business page.

The economy might be picking up, and people are growing a tad more optimistic, but many still think economic wounds will have a long-lasting impact.

A new Pew Research Center survey found that across 17 publics including the US a majority of respondents think kids will be financially worse off than their parents. Across everyone surveyed, a median of 64% were pessimistic about childrens’ financial futures.

That number was higher for US respondents, with 68% saying they think that kids will be financially worse off. However, respondents in France and Japan were even more concerned, with 77% of respondents in both countries saying that they think kids will be financially worse off.

Another generational wealth gap

As Insider’s Hillary Hoffower previously reported, there’s already a wealth gap between boomers and millennials. The older generation has benefited from everything from low interest rates to investments in companies that bolster pollution – a problem that will exacerbate the climate crisis and its strain on the younger generation.

That’s on top of the Great Recession already leaving millennials behind when it comes to wealth accumulation; as Insider’s Hillary Hoffower reported, the Federal Reserve Bank of St. Louis found that millennials earned 34% less than they would have had there been no recession.

Plus, the past year has brought yet another recession. This time, younger workers were again pummeled. According to a report from the International Labour Organization, workers ages 15-24 saw employment losses of 8.7%; among adults, employment loss was broadly 3.7%. That report warned that Gen Z, which has dealt with education cut short by the pandemic and a recession during their entry to workforce, was at risk of becoming a “lost generation.”

As Insider’s Hillary Hoffower reported, Gen Z was the most unemployed generation in the wake of pandemic’s economic devastation. However, some hope may be on the horizon: Gen Z will still take over the economy in a decade, Hoffower reported, despite the pandemic potentially making them lose out on $10 trillion in earnings.

On the whole, a median 52% of respondents in the Pew survey – and 71% in the US – still think that the current economic situation is bad. In New Zealand and Australia, respondents were more optimistic, with over 70% of respondents in both answering that the economic situation is good.

Read the original article on Business Insider

Meet the typical 40-year-old millennial, who has $128,000 in debt, is not nearly as wealthy as their parents were, and is known as ‘geriatric’

millennial
The oldest millennials turn 40 this year.

The oldest millennials enter middle age this year.

The generation turns ages 25 to 40 in 2021, per the Pew Research Center’s definition. Like everyone, millennials are aging. But it’s a hard concept to grasp when the media narrative has painted millennials as young, frivolous 20-somethings who love selfies and can’t afford anything because they spend too much money on avocado toast.

It’s an inaccurate picture of the entire generation, which has been shaped by technological advancements and a broken economy. But the typical 40-year-old millennial especially doesn’t quite align with this image. Many feel they embody some characteristics of both Gen X and millennials, having experience with both analog and digital worlds.

Millennials are known for battling a series of economic challenges, from student debt to the Great Recession. The typical 40-year-old millennial bore the brunt of the financial crisis, leaving them with less wealth and more debt than past generations at their age. But, compared to their younger generational peers, they have less student debt and are more likely to own homes and have kids – a sign that many have been able to recover from the financial fallout.

Here’s what life looks like for the typical 40-year-old millennial.

The typical 40-year-old millennial was one of those hardest hit by the Great Recession.

40 year old millennial

When the 2007 financial crisis began, the 40-year-old millennial was 26, an age at which most of the generation hadn’t yet accumulated substantial wealth. It’s this cohort that bore the true brunt of the financial crisis,which left lingering effects a dozen years later when the coronavirus recession rolled around.

From the very beginning of their careers, they entered a dismal labor market that set them up for a long recovery.

“Millennials have lifelong damage, given the severity of the Great Recession,” Mark Muro, a senior fellow and policy director at the Brookings Institution, previously told Insider, adding that “older millennials were squarely hammered.”

 

Their early post-graduate years were marked by a tough job market that led to wage stagnation. The typical 40-year-old millennial earns $73,000 a year.

office worker

Boomers earned around $72,000 at that age, while Gen X earned around $68,000, according to a Bloomberg analysis of Federal Reserve data. That is all to say: wages have remained stagnant since 1989.

Wages haven’t kept up with soaring living costs for everything from healthcare to housing, creating a financial imbalance that’s been difficult for the 40-year-old millennial to rectify.

 

It’s made building wealth difficult. With a net worth of $91,000, the typical 40-year-old millennial is only 80% as wealthy as their parents were at their age.

Stressed woman

At age 40, Gen X was worth $94,000. Boomers held $112,000 in wealth at that age, per Bloomberg.

But the oldest millennials are catching up. A 2018 St. Louis Fed study originally found that those born in the 1980s have median levels 34% below older generations, causing the Fed to deem them at risk of becoming a “lost generation” for wealth accumulation.

“Not only is their wealth shortfall in 2016 very large in percentage terms, but the typical 1980s family actually lost ground in relative terms between 2010 and 2016, a period of rapidly rising asset values that buoyed the wealth of all older cohorts,” the 2018 report read.

A follow-up study in 2021 found 1980s millennials gained some ground, narrowing their wealth deficit to 11%. “It turns out that millennials may not be as ‘lost’ as we once thought,” according to the report. 

 

 

They also have $128,000 in debt. While some of this may be from student loans, they don’t carry the weight of student debt as much as younger millennials

Student loan debt

This debt is way more than what Gen X and boomers had at age 40 — $94,000 and $112,000, respectively, per Bloomberg.

One might first look to student loans as the source of this debt. College tuition has more than doubled since the 1980s, and student-loan debt reached a national high of $1.5 trillion in 2019. Many millennials are shouldering their share of this burden.

The typical 40-year-old millennial entered college in 1999, and graduated in 2003 (under a typical four-year plan). According to an analysis by the research team at Education Data, 73% of students graduating that year took out a student loan. That year, the average debt at graduation per student was $16,070, equivalent to $22,170 today.

But that’s not as much as the typical youngest millennial, who turns 25 this year. They graduated with about $29,500 in student debt.

 

It’s likely a good chunk of that debt comes from a mortgage. The typical 40-year-old millennial owns a home.

house

According to an Insider analysis of 2019 American Community Survey microdata from the University of Minnesota’s IPUMS program, 61.9% of 40-year-old millennials (who were 38 when the survey was taken) own a home.

However, that’s still lower than previous generations at that age: 68% of Gen X and 66% for boomers. As housing prices climbed over the years, millennials began renting longer and buying later. While some have finally been able to afford a house amid low interest rates during pandemic, the demand has exacerbated a historic housing shortage that has pushed homeonwership further out of reach for other millennials.

The homeowning life stage means that most 40-year-old millennials have a mortgage. It aligns with previous findings from an Insider and Morning Consult survey, which found that’s it not just student-loan debt millennials are swimming in. A mortgage is typically their biggest debt, according to the survey. 

 

They also have kids. Achieving these standard life milestones is a sign that many have caught up from the delayed effects of the Great Recession.

mother baby

“The oldest millennials delayed many of the traditional markers of adulthood, such as marriage, kids, and buying homes, as they went through the eye of the Great Recession and the long and uneven recovery afterward,” Jason Dorsey, a consultant and president of the Center for Generational Kinetics, previously told Insider

As millennials delay marriage and homeownership, they’ve delayed childbearing until they they felt more financially sound. More women are having kids at a later age than ever.

But as of 2019, 66% of 40-year-old millennials (who were 38 at the time), have kids, according Insider’s analysis of 2019 American Community Survey microdata from the University of Minnesota’s IPUMS program.

But the typical 40-year-old millennial dissociates from their generation. Caught between Gen X and millennials, they almost feel generationless.

older millennial

As Alisha Tillery wrote for Shondaland, being the oldest millennial “is to be an outlier of sorts, to really have no generation to identify with at all, yet be perfectly okay with not fitting into one box or the other.”

“We are caught in a tight space that remembers the days of old (before Google, Facebook, and YouTube), but is also intrigued by the future and a new way of doing things,” she added.

Jessica Guinn Johnson, an attorney in Baton Rouge, Louisiana, born in 1981, told Tillery, “I never found that I fit in the millennial mold, but identified more with Gen X.”

Robert L. Reece, a University of Texas-Austin sociology professor, told Tillery there’s validity in classifying oneself as a millennial but not identifying with the typical characteristics of the generation.

It explains why the 40-year-old millennial is largely seen as being part of a microgeneration, for which there have been many names.

geriatric millennial

As Tillery wrote, some millennials feel they better identify with the cusper (someone who straddles two generations) term Xennial. It describes a micro-generation “that serves as a bridge between the disaffection of Gen X and the blithe optimism of millennials,” Sarah Stankorb wrote for Good Magazine in 2014.

In a Medium article that went viral in the spring, author and leadership expert Erica Dhawan called the micro-generation that the 40-year-old millennial falls into “geriatric millennials,” which she defines as those born between 1980 and 1985. What sets them apart, she recently told Insider, is their experience with technology.

 

The typical 40-year-old millennial remembers PCs, the days of early dial-up, and MySpace, but also feels comfortable on TikTok and Clubhouse.

clubhouse app

Whereas younger millennials don’t know a world without digital tools as a primary form of communication, the eldest millennials remember when they were very primitive.

“They were the first generation to grow up with a PC in their homes. They joined the first social media communities on Facebook and MySpace. They remember dial-up connections, collect calls, and punch cards,” Dhawan previously told Insider, adding they also remember things like Napster for burning CDs, as well as the regular flip phone. 

But while they’re fluent in the early days of the internet and digital technology, they’ve also been able to easily adapt to newer forms of digital media, like TikTok, which may be unfamiliar to older generations like baby boomers and commonplace among younger generations like Gen Z.

“This is a unique cohort that straddles digital natives and digital adapters,” Dhawan said.

 

But straddling a digital divide means the typical 40-year-old millennial is an asset in the workforce.

business meeting

With the skills of both older and younger generations, Dhawan said, they can bridge communication styles in the workplace.

For example, she said, a geriatric millennial would know to send a Slack message to a Gen Z co-worker instead of calling them out of the blue, which they might find alarming. But they would also know to be mindful of an older co-worker’s video background and help walk them through such technology.

“They can help straddle the divide,” she said. “They can teach traditional communication skills to some of those younger employees and digital body language to older team members.”

Read the original article on Business Insider

All the things that will make your summer vacation more expensive this year

summer vacation
Summer 2021 is getting a little pricey.

  • You’ll be paying more for airlines, hotel stays, and vehicle rentals this summer.
  • Prices for all have soared during 2021, hitting their highest yet in June.
  • The Consumer Price Index rose 0.9% between May and June, much more than the consensus estimate of 0.5%.
  • See more stories on Insider’s business page.

Summer vacation is getting expensive.

Prices for airlines, hotel stays, food, and car and truck rentals have all soared over the past several months as part of a larger inflation trend amid supply chain issues and an economic reopening. But they all hit new heights in June.

Just look at the chart below, which details travel inflation during 2021 based on the Bureau of Labor Statistic’s Consumer Price Index, which tracks how the prices of a broad variety of goods and services change from month to month.

Car and truck rental prices have increased the most since January, currently 64.4% higher than they were at the beginning of the year. From May to June alone, vehicle rental prices increased by 5.2%.

Prices for hotel stays are also climbing after dipping slightly in May. They increased the most month-over-month, by 7.9% from May to June. They’re currently 19.8% higher than they were in January.

Plus, if you eat our or hit the grocery store while on vacation, food like beef, pork, and eggs cost more these days.

Though not called out in BLS data, Uber, Lyft, and Airbnb prices are also on the rise.

Airline prices have also ticked up since the beginning of the year, but not to the extent that lodging and vehicle rentals have. They saw a more modest increase of 2.7% from May to June, currently 15.4% more expensive than at the start of 2020.

Consumer prices overall surged even more than expected last month, rising 0.9% between May and June. That far exceeded Bloomberg’s consensus estimate among economists of 0.5%. It’s the highest month-over-month inflation rate since April 2008’s 1.0% increase.

The index was 5.4% higher than it was in June 2020, also higher than economists’ expectations for a 4.9% year-over-year increase, according to Bloomberg. June’s annual increase follows a 4.9% year-over-year increase in May.

Ready for a travel boom

The travel industry itself has contributed to the surge in prices. After spending a year in quarantine, Americans were itching to travel again. As many became vaccinated and restrictions lifted, some were finally ready to pack their bags.

As early as late March, travel was on the verge of a booming comeback. Americans had plans to travel soon, card spending on airlines and hotels was already up, and airports started seeing their busiest weekends since pre-pandemic times.

Set to fuel the travel boom are wealthy millennials, who are most likely to spend their pandemic savings on travel this year, according to a May survey from Accenture and TripAdvisor that polled 1,000 Americans. It found this cohort comprised the highest rate of luxury bookings (trips costing at least $5,000) among all other generations surveyed.

“Whether it’s a domestic or international flight, young travelers are going the distance and heading to beaches, cities, and even on cruises,” the survey reads.

It’s all good for the economy, which needs such spending to get back on its feet. But while the upside of high travel demand may be a healthier economy, the downside is that Americans will have to pay more for it. It spins an endless inflation cycle: The more everyone wants to travel, the more costly doing so will be.

It’s yet to be seen whether inflation is a temporary effect from reopening or a longer-term problem. But travel inflation may not be going anywhere soon. That vehicle rentals have seen the most consistent and highest demand indicates not everyone is comfortable traveling publicly just yet. It’s a sign that we may see a bigger uptick in airline and hotel spending – and prices – down the road once they’re ready for more public travel.

That is all to say: you’ll be shelling a lot more to fly, drive, and relax this summer.

Read the original article on Business Insider

Millennials are still driving a ‘roaring ’20s’ of homeownership demand, but there aren’t enough houses for them

suburbs houses
There are too many potential millennial homebuyers, and not enough homes.

A record number of millennials wanted to buy homes in 2020, but the real estate market can’t keep up.

So finds financial services company First American, which measures potential homeownership demand based on lifestyle, societal, and economic factors in what it calls its Homeownership Progress Index (HPRI). When potential homeownership demand exceeds the actual homeownership rate, it signifies that external forces are suppressing housebuying.

Its new report reveals that potential homeownership demand has surpassed the homeownership rate since 2010, following the aftermath of the Great Recession. But the difference between the two hit an all-time high during the pandemic. Demand rose from 68.8% the year prior to 70.21% in 2020, while the national homeownership rate grew from 64.7% to 66.7%.

Contrary to the popular narrative that millennials can’t afford to a buy a house because they spend too much money on avocado toast, there are more millennials trying to become homeowners than there are houses available.

Housing was largely an out-of-reach dream for millennials for years. Even before the pandemic, they were struggling to save for a down payment as they grappled with the fallout of the financial crisis and the burden of student debt.

But as the generation became more financially stable with age, its potential homeownership demand has increased by 3.5 percentage points year-over-year, per First American. That’s more than any other generation. The majority of millennials turned 30 in 2020 and the oldest turn 40 this year, signifying they’ve reached the peak age for first-time homeownership.

Read more: Millennials are getting screwed again by their 2nd housing crisis in 12 years

Not enough houses for homebuying millennials

America has been running out of houses amid a historic housing shortage. A lumber scarcity and the pandemic itself have only exacerbated the shrinking inventory, as has the wave of homebuying demand during a remote work era.

“We’ve been underbuilding for years,” Gay Cororaton, the director of housing and commercial research for the National Association of Realtors (NAR), told Insider at the end of April. She said the US had been about 6.5 million homes short since 2000, then facing a two-month supply of homes that should look more like a six-month supply. Because of this, she added, homeownership is “going to be more difficult for millennials.”

Daryl Fairweather, the chief economist at Redfin, added that there have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s. She said it’s not enough homes for millennials, who are the biggest generation, to buy.

The imbalance has propelled housing costs to several record highs, resulting in bidding wars nearly everywhere nationwide, with competing bidders throwing down all-cash bids and higher down payments. It’s become millennials’ second housing crisis during their adulthoods.

Skyrocketing prices have pushed homeownership out of reach for many millennials, despite some of their peers leading the housing recovery. While the wealthier cohort of the millennials may be better positioned to buy a home, even those who successfully managed to scrape together some savings are facing dwindling chances of homeownership.

But millennials will be driving the housing market for years to come. As Odeta Kushi, deputy chief economist at First American, wrote in the report, “While millennial homeownership has been delayed relative to their generational predecessors, millennials now have the greatest influence on the housing market and remain poised to fuel a ‘roaring 20s’ of homeownership demand.”

Read the original article on Business Insider

How to tell if you’re a geriatric millennial

geriatric millennial
Geriatric millennials are familiar with both old and new forms of communication.

  • The term “geriatric millennial” divided the Internet this spring in a viral Medium article.
  • The author spoke to Insider about why it both resonated with and offended readers.
  • She also shared the hallmarks of a geriatric millennial and how they straddle the workplace’s digital divide.
  • See more stories on Insider’s business page.

Author and leadership expert Erika Dhawan never expected the term “geriatric millennial” to go viral.

A self-identified geriatric millennial (which she defines as elder millennials born in the early 1980s), Dhawan told Insider she first heard the term at brunch with friends and related to it. But when she wrote about this micro-generation’s influence in connecting older and younger generations in the workforce for Medium this past spring, it quickly went mainstream and divided the Internet.

While many, like Dhawan, related to the term, others were offended by it.

“I think that the fact that the word ‘geriatric’ carried such a negative connotation really also has the question: What’s wrong with being old?” she said. “The way that individuals reacted, I think should encourage all of us to start a reflection on how we view older members of our society.”

Dhawan said she’s spent a decade investigating, researching, and finding new ways to encourage collaboration and communication in the workplace, which she explores in her new book, “Digital Body Language.” She said that while interviewing American workers, she found that some micro-generations were “impossible to ignore.”

She said that geriatric millennials are unique because they straddle a digital divide between older and younger generations in the workplace, which enables them to bridge communication styles.

The hallmarks of this micro-generation aren’t meant to exclude younger millennials who may have experienced them as well, she added.

“What it’s really meant to do is pinpoint a specific moment in time where the digital tools were primitive and where we were coming of adulthood,” she said. “We can look at all millennials as being the same, but there are differences based on our experiences at different life stages.”

Meet the typical geriatric millennial, according to Dhawan.

You were born in the early 1980s, making you in your mid-to-late 30s or early 40s.

A woman wearing a blue top and white jeans is working on her living room floor with colourful toys next to her.
A mother works remotely in the same room as scattered children’s toys.

Dhawan defines geriatric millennials as those born from 1980 to 1985. That means they’re turning ages 41 to 36 this year. 

But age is just one component. “Micro-generations are not simply just the years you were born, but, the strongest indicator is really how you use and engage with technology,” Dhawan said. 

 

You remember PCs, the days of early dial-up, and MySpace.

classic pc

Whereas younger millennials don’t know a world without digital tools as a primary form of communication, Dhawan said, geriatric millennials remember when they were very primitive.

“They were the first generation to grow up with a PC in their homes. They joined the first social media communities on Facebook and MySpace. They remember dial-up connections, collect calls, and punch cards,” she added.

They also remember things like Napster for burning CDs, as well as the regular flip phone. “Those that are maybe two to five years older than us know truly a world of, you know, mobile phones and never had to memorize people’s phone numbers for landline,” she said.

 

 

But you also feel comfortable on TikTok and Clubhouse.

clubhouse app

While geriatric millennials are fluent in the early days of the internet and digital technology, they’ve also been able to easily adapt to newer forms of digital media, like TikTok, which may be unfamiliar to older generations like baby boomers and commonplace among younger generations like Gen Z.

“This is a unique cohort that straddles digital natives and digital adapters,” Dhawan said, adding that they’ve spent the same amount of years in both analogue and digital forms of communication, making them fluent in both. 

 

 

Despite your digital skills, you’re also aware of the importance of personal communication.

professional woman conversation

Geriatric millennials also remember the importance of traditional body language, Dhawan said. “The lean-in, the direct eye contact … those are critical traits, even in our digital world.”

That means they’re comfortable with communication styles of boomers and Gen Xers, she added, while adapting to the the communication style of younger, digital native millennials and Gen Z.

“It’s critically important to keep adapting to the times while, remembering the importance of physical, face-to-face communication,” she said.

 

You act as a bridge in the workplace.

workplace

Dhawan believes that being skilled in both digital and personal forms of communication enables geriatric millennials to serve in a hybrid role in the workplace.

For example, she said, a geriatric millennial would know to send a Slack message to a Gen Z co-worker instead of calling them out of the blue, which they might find alarming. But they would also know to be mindful of an older co-worker’s video background and help walk them through such technology.

“They can help straddle the divide,” she said. “They can teach traditional communication skills to some of those younger employees and digital body language to older team members.”

She likened the geriatric millennial’s role to being a translator, akin to learning a new language in a new country. “They can cater to the needs of different people and have different degrees of understanding of the digital world, but also they have a patience for the digital world that maybe future generations won’t because they don’t know a world without it.”

Read the original article on Business Insider

The ‘Great American Land Rush’ is wiping out the starter home

starter house
Millennials can barely get their hands on a starter house.

  • The number of starter homes on the market sits at a 50-year low, per Freddie Mac data.
  • It’s not good news for millennials, many of whom are first-time homebuyers fueling a housing boom.
  • A housing expert recently told the WSJ that it’s creating a “Great American Land Rush.”
  • See more stories on Insider’s business page.

Starter homes are running dry, and it’s a big pain for those who need them most – millennials.

The generation, which turns ages 25 to 40 this year, has reached peak age for first-time homeownership. More millennials became homeowners than any other generation in 2020, driving a yearlong housing boom.

But this increased demand from millennials in an era of remote work, coupled with a lumber shortage and the fact that contractors have been underbuilding over the past dozen years, has exacerbated a shrinking housing inventory, with record-high prices for remaining houses.

As bidding wars rife with all-cash offers and higher down payments heat up the market, many millennials face the second housing crisis of their adulthoods.

There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, Daryl Fairweather, chief economist at Redfin, previously told Insider. Data from Freddie Mac shows that the housing shortfall has led to a decline in entry-level homes – the ones most affordable for millennials.

Freddie Mac defines an entry-level home as one under 1,400 square feet. Its data reveals that the current supply sits at a 50-year low. In the late 1970s, about 418,000 entry-level homes were built on average per year. In 2020, only 65,000 entry-level homes were built, even though 2.38 million first-time homebuyers purchased a home that year.

“There just aren’t enough of these homes to fulfill the demand,” Ed Pinto, director of the American Enterprise Institute, recently told The Wall Street Journal. “It’s creating this ‘Great American Land Rush,’ as I call it. People are moving around and there’s tremendous demand, but the inventory is down.”

The fall of the starter home

Housing was largely an out-of-reach dream for millennials for years. Even before the pandemic, they were struggling to take advantage of historically low mortgage rates as soaring living costs, student debt, and the fallout of the Great Recession made saving up for a down payment difficult.

They were already contending with a dwindling starter home supply back then.

In 2018, starter homes represented just 20.9% of available housing inventory in the US, according to Trulia. And a Realtor.com report at the end of 2019 predicted that while low interest rates would make it easier for millennials to buy, a shortage of entry-level homes would prove to be a major obstacle, largely because newbuilds that year were mostly devoted to “upper-tier housing” that cost at least $500,000.

Real-estate investors were only making the problem worse. In 2018, they bought roughly 20% of US starter homes – twice as many as they did 20 years ago, The New York Times reported, citing real-estate data provider CoreLogic.

Now, the pandemic and its consequent recession have added fuel to the fire just as millennials were finally recovering from their accumulated economic woes. “Now that they have economically recovered and are looking to buy a home for the first time, we’re faced with this housing shortage,” Fairweather told Insider. “They’re already boxed out of the housing market.”

Are you a millennial feeling shut out of the housing market? Email this reporter at hhoffower@insider.com.

Read the original article on Business Insider

Over half of young adults plan to use their pandemic savings on buying a home, which could worsen the housing crisis

house
Millennials and Gen Z are planning to use their pandemic savings on buying a house.

America may be running out of houses, but young adults are continuing to set their sights on homeownership.

More than half of them (59%) said they plan to use their pandemic savings on a down payment for a home, according to a recent Zillow survey that polled over 1,200 millennials and Gen Zers. It was the most common answer beyond using their savings for everyday living expenses.

“Even in an unprecedented global pandemic, homeownership still appears to be a priority and aspiration among the sometimes called ‘rent forever generation,'” the report reads.

The survey found that 83% of young adults reported saving money in at least one category during the pandemic. This cohort found themselves on the upside of the millennial wealth gap that the pandemic exacerbated.

Lower-income millennials who were already contending with an affordability crisis had little to fall back on as they experienced job loss and pay cuts. But a higher-earning group with stable income was able to save and invest money they would have otherwise spent in non-pandemic times.

Two financial advisers told Insider last June their high-net-worth millennial clients were tucking away excess cash, as much as $3,000 a month in some cases, which normally would’ve been spent on brunches or plane tickets.

Read more: Millennials are getting screwed again by their 2nd housing crisis in 12 years

The extra cushion helped them drive the 2020 housing boom – more millennials became homeowners than any other generation that year. Millennials are turning ages 25 to 40 in 2020, meaning many of them are entering prime homebuying years.

Interest rates hit a historical low in 2020, making it easier for those with enough money saved for a down payment to buy a home. But the combination with the year when many were working from home soon led to a cutthroat housing market, marked by a historic housing shortage and lumber scarcity which both propelled housing costs to several record highs. That has resulted in bidding wars nearly everywhere nationwide, with competing bidders throwing down all-cash bids and higher and higher down payments.

Many millennials able to snag a house did so by paying above market price, while others saw homeownership pushed further out of reach as housing prices skyrocketed and morphed into an inventory crisis.

As Insider’s Ben Winck reported, the lumber shortage has largely made it too expensive to for builders to construct more homes. Housing starts fell nearly 10% through April after surging the month prior, signaling supply won’t bounce back all that soon. Lumber has come down somewhat since from its super-expensive level, though.

Considering that millennials have just reached peaked homebuying age, and some Gen Zers are already househunting, young adults will be driving the housing market for years to come. This survey suggests that wealthier members of both generations will put their pandemic savings toward down payments, so the unequal housing boom may not abate any time soon.

Whether they will be able to find an available house is another question.

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70% of millennials are living paycheck to paycheck, more than any other generation

millennial
Millennials paychecks’ are wearing thin.

Millennials’ wallets are rather skimpy.

Seventy percent of the generation said they’re living paycheck to paycheck, according to a new survey by PYMNTS and LendingClub, which analyzed economic data and census-balanced surveys of over 28,000 Americans. It found that about 54% of Americans live paycheck to paycheck, but millennials had the biggest broke energy.

By contrast, 40% of baby boomers and seniors said they live paycheck to paycheck, the least of any generation. Living paycheck to paycheck reflects economic needs and wants just as much, if not more than, incomes or wealth levels, according to the report. Age and family status also factor in greatly. This explains why millennials, who turn ages 25 to 40 this year, are struggling.

“Millennials – especially older ones – are collectively at important stages of their lives,” the report reads. “They may be starting families or taking on their first major purchases, such as homes and new vehicles, but they may also be less advanced in their careers than their older counterparts.”

It doesn’t help that millennials have faced one economic challenge after another since the oldest of them graduated into the dismal job market of the 2008 financial crisis. A dozen years later, many are still grappling with the lingering effects of The Great Recession, struggling to build wealth while trying to afford soaring costs for things like housing and healthcare and shouldering the lion’s share of America’s student-loan debt.

The pandemic threw yet another wrench into their plans by giving them their second recession and second housing crisis before the age of 40. The report acknowledges that the pandemic played a major role in that stretched thin feeling.

“Living paycheck to paycheck sometimes carries connotations of barely scraping by and of poverty,” it states. “The reality of a paycheck-to-paycheck lifestyle in the United States today is much more complex, and the current economic environment has made it even more complicated.”

It’s left even six-figure earning millennials struggling to get by. The survey found that 60% of millennials raking in over $100,000 a year said they’re living paycheck to paycheck.

Of course, the economy isn’t fully to blame. Some millennials, particularly the six-figure earners, are known to fall victim to lifestyle creep, when one increases one’s standard of living to match a rise in discretionary income. This makes it more difficult to balance spending and savings habits.

But the report found that those who felt they were living paycheck to paycheck were mostly financially responsible. If they received additional sources of income during the year, many tucked it away rather than spent it.

It seems, then, that it’s a combination of external economic circumstances, a precarious life stage, and some spending habits that are leaving millennials feeling strapped for cash.

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60% of millennials earning over $100,000 say they’re living paycheck to paycheck

wealthy millennial
High-earning millennials are stretching their paychecks.

High-earning millennials are feeling broke.

Sixty percent of millennials raking in over $100,000 a year say they’re living paycheck to paycheck, according to a new survey by PYMNTS and lending company LendingClub which analyzed economic data and census-balanced surveys of over 28,000 Americans.

It found that the more than half (54%) Americans are living paycheck to paycheck. And nearly 40% of high-earners – those making more than $100,000 annually – say they live that way.

That means high-earning millennials aren’t the only ones feeling stretched thin, but they feel that way more than their six-figure making peers. Living on constrained budgets may therefore have less to do with income and more to do with expenses, the report says.

That’s partly due to lifestyle choices. Many of these millennials are likely HENRYs – short for high earner, not rich yet. The acronym that was invented back in 2003, but has come to characterize a certain group of 30-something six-figure earners who struggle to balance their spending and savings habits.

HENRYs typically fall victim to lifestyle creep, when one increases their standard of living to match a rise in discretionary income. They prefer a comfortable and often expensive lifestyle that leaves them living paycheck to paycheck.

Read more: Here’s why so many millennials making 6-figure salaries still feel broke

A $100,000 salary isn’t what it was

The economy is also a huge factor behind six-figure-earning millennials feel so broke.

As the report reads, “Living paycheck to paycheck sometimes carries connotations of barely scraping by and of poverty. The reality of a paycheck-to-paycheck lifestyle in the United States today is much more complex, and the current economic environment has made it even more complicated.”

It cited the example of a college-educated 35-year-old earning more than $100,000 while juggling a mortgage, student-loan debt, and a child, which could leave them with little savings for big purchases or unexpected emergencies.

The generation is facing an affordability crisis. Income increases simply have not kept up with an exponential increase in living costs, and the pandemic hasn’t helped matters by throwing job loss and pay cuts into the mix.

The cost of education has also more than doubled since the 1970s, leaving many millennials racked with student debt. Priya Malani, the founder of Stash Wealth, a financial firm that works with HENRYs, previously told Insider that 40% of her clients had student loans – they owe $80,000 on average.

As a byproduct of this increased cost in living, the middle class has been shrinking. Pew Research Center defines the US middle class as people earning two-thirds to twice the median household income, earning about $48,500 to $145,500 in 2018, per most recent data available.

That means a six-figure salary is no longer what it used to be. In today’s economy, $100,000 is considered middle class in the US.

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I spent 3 weeks talking to realtors across the country about how to navigate the chaotic real estate market. Here are my 4 biggest takeaways about homebuying.

Male realtor shows house for sale to young couple
Real estate sales have been booming during the pandemic as many Americans migrated out of big cities or upgraded to larger homes.

  • I spent weeks talking with realtors from across the country about the chaotic market.
  • They shared their best tips on what to know in advance and how to win a bidding war.
  • I found four major takeaways, including that buying too quickly could lead to regret.
  • See more stories on Insider’s business page.

Last year, during the initial weeks of the pandemic lockdowns, it was comforting to indulge in a fantasy: a home with extra space and maybe even it’s own backyard.

This life, which previously felt unavailable to many city-dwelling millennials like me, suddenly seemed within reach. The pandemic made working from anywhere the norm, not the exception. And those of us who were lucky to have kept our jobs during a period of economic uncertainty for many Americans were able to save money for maybe the first time in our adult lives, aided by stimulus checks and, frankly, nothing to spend money on.

All of a sudden, this fantasy seemed more like a possibility, and many millennials decided to take the leap. Combined with existing homeowners looking to upgrade or expand, or simply take advantage of low interest rates, the US real estate market has become a wild land-grab, with buyers hoping to snap up homes amid soaring prices.

Read more: Should I buy a home right now? Here are the 5 things you should know before diving into the bonkers housing market.

To learn more about the market – and perhaps, selfishly, to understand the situation in case I wanted to explore the process myself – I turned to eight realtors who work in markets across the country to answer questions like what prospective buyers should know going into the process, how to win a bidding war, and what other buyers are looking for in a home right now.

Here are my biggest takeaways after spending three weeks learning from realtors nationwide:

Try not to fall in love with every house you see.

Given the competitive state of the market, the homebuying process can take a toll, emotionally speaking.

Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, said that in some situations, both he and his clients have ended up feeling “beat up.”

“I had one client who wrote 15 offers before they finally got one, and that’s exhausting,” he said.

Clemmons said his clients are going to multiple showings, putting in several offers, and generally being put through “the emotional roller coaster of, ‘Are we going to get this one?'”

“What I would say is, check your heart when you walk through a house,” he added. “[Going to a showing is] not a guarantee that you’re going to get it. Put your best foot forward, and be patient.”

Know that you can always fix ugly.

Mary Pope-Handy, an agent with Northern California firm Sereno and a blogger who writes about Silicon Valley real estate, told Insider that she sees lots of first-time homebuyers who keep getting boxed out of competitive bidding wars. While many of her clients are looking for a move-in ready home, that’s not always an option.

She advises those buyers to look for a house that’s been on the market for a while, because it’s less likely to be competitive. But that advice does come with a caveat: The kinds of homes that have been for sale for a month or more, especially given the current state of the market, usually have something wrong with them. It could be that it’s priced too high, or that it’s just plain ugly.

“You can fix ugly,” she said. “I would always go with the ugly house, with walls in the right places, in a good location, and then fix ugly over time.”

Don’t ignore the condo market.

For some buyers, condos aren’t as attractive of an option as a standalone house, especially during the pandemic, said Sean Waeiss, a broker and the owner of Wise Property Group in Austin.

Condos aren’t always what people envision as their first home since they’re grouped together and don’t always have their own outdoor space. From an investment standpoint, too, a condo probably isn’t going to gain value like a single-family home. “It’s the canary in the coal mine. With recessionary periods and that sort of thing, it’s the first to get hurt and it’s the last to recover,” he said.

But a condo could also be the perfect option for a younger homebuyer, especially one who keeps getting outbid on single-family homes, Waeiss said. Demand, at least in Austin, is significantly lower than supply, and condos are typically situated in urban centers where it’s possible to walk to shops, bars, restaurants, and even the office – a key amenity now that cities across the US are reopening.

“I think Americans, by nature, have short-term memories,” he said. “When the majority of the country is vaccinated and events are happening, concerts are happening on a regular basis, and restaurants are operating at full capacity … I think that there’s going to be this increased demand in these dense downtown condo areas.”

Don’t buy a home just to own ‘something.’

Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, said she’s putting listings on the market at 8 a.m., and by 5 p.m., she’ll already have 20 offers. In an effort to drum up inventory, she’s been sending out letters to the neighborhoods her clients are looking at in hopes of finding a “dormant seller.”

Clemmons said that some of his buyers have started putting offers in on “coming soon” listings, sight unseen.

But a recent survey from Bankrate found that 64% of millennial homeowners are experiencing regret after buying their current home, mostly due to unexpected costs. Most said that maintenance and other costs are too high, their home is in a bad location, or they bought a house that’s either too big or too small for them.

Scott Trench, the CEO of the real-estate-investing resource BiggerPockets, recently told Insider’s Taylor Borden that buyers should think twice about trying to purchase a house right now.

“Frantically trying to buy ‘something’ is a great way to make a bad purchase,” he said.

Read the original article on Business Insider