A new report from The Atlantic states that while inverted yield curves, economic downturns, and slowing growth will impact everyone, it will be the millennials that will be hit the hardest.
“Millennials got bodied in the downturn, have struggled in the recovery, and are now left more vulnerable than other, older age cohorts,” said The Atlantic’s Annie Lowery in her article. “As they pitch toward middle age, they are failing to make it to the middle class, and are likely to be the first generation in modern economic history to end up worse off than their parents. The next downturn might make sure of it, stalling their careers and sucking away their wages right as the Millennials enter their prime earning years.”
The report states that as of 2014, millennial men were earning no more than Gen X men when they were the same age, and 10% less than Baby Boomers, although the economy being much bigger. Millennial women were earning less than Gen X women.
Low earnings and skyrocketing student-loan debt has led to a portion of millennials being shut out of the housing market. The Atlantic states the millennial homeownership rate is 8% lower than that of Gen Xers and Baby Boomers at the same age.
Although affordability issues have hurt millennials’ ability to enter the housing market, reports show millennials put a high priority on housing and are active once they enter the market.
A July report from Ellie Mae revealed that millennials are taking advantage of historically low mortgage rates, which has caused refinance activity to spike.
“Refinance activity amongst millennials continued to rise as interest rates dropped,” said Joe Tyrrell, COO at Ellie Mae. “Time to close has been trending downward recently, but in May, the volume of activity pushed the mortgage finance industry to a tipping point where it spiked dramatically. As the digitization of the mortgage process continues to evolve, increased automation will help borrowers and lenders close all loan types more efficiently, even during periods of increased activity.”
Although millennials—albeit few—are finding a way into the housing market, The Atlantic states that the generation has missed out on the rebound of home prices since the Great Recession.
“Millennials have also been forced to shell out hundreds of billions of dollars in rent as housing costs have skyrocketed in many urban areas. This represents a large generational transfer of wealth from the young to the old,” the report states.