Millennials Weren’t a Lost Generation. They Were a Late One

In 2018, Federal Reserve economists pondered whether young Americans from the 1980s would form a "lost generation." Two years prior, the typical household led by someone from that decade possessed 34 percent less wealth than earlier generations' wealth should have been for their age. Reexamining these figures in 2024, the same researchers discovered that by 2022, the typical 1980s household had amassed 37 percent more wealth than the benchmark.

Despite this surprising reversal, the belief persists that millennials are the first American generation to fare worse than their parents. This notion stemmed from data collected during challenging periods, notably the sluggish recovery after the 2008 global financial crisis and the initial impact of the pandemic. Millennials' current situation surpasses their parents in several aspects, such as income levels and wealth accumulation, according to various measures.

Nevertheless, the story is incomplete, as homeownership remains an area where they lag behind. Economist Raj Chetty and his team found that around 90 percent of individuals born in the 1940s earned more at age 30 than their parents had at the same age, while those born in the 1980s had a 50/50 chance. The Federal Reserve's 2018 study highlighted the wealth aspect of millennials' predicament.

Of the six birth cohorts they examined, only the 1980s group experienced further decline in wealth between 2010 and 2016, despite rising asset prices benefiting older families. This cohort carried an unusually high burden of debt, including student loans, auto loans, and credit card debt, which prevented them from reaping the benefits of increasing home and stock values.

The gloomy predictions began in January 2020, with CNN reporting that millennials were worse off than their parents, a first in American history. The Washington Post dubbed them "the unluckiest generation in U.S. history," suggesting that no other generation had seen slower economic growth after entering the workforce. The consequences were expected to persist throughout their lives, affecting their earnings, wealth, and ability to own a home.

However, the narrative was proven flawed. An April 2022 study by Kevin Corinth of the American Enterprise Institute and Jeff Larrimore of the Federal Reserve Board compared five generations at ages 36 to 40, adjusting for taxes, government benefits, inflation, and household size. They found that millennials' median household income was 20 percent higher than Gen X's at the same age.

Gen X had outperformed the boomers by 16 percent. While millennials' higher net college costs were offset by a relatively short period of their mid-career income advantage, housing gains played a significant role in their wealth accumulation. The Federal Reserve traced most of the 1980s cohort's wealth leap to housing and labeled 2022 "stellar but unusual."

However, the latest Survey of Consumer Finances, released on October 9, suggests that these gains have persisted, with median net worth for households headed by 35-to-44-year-olds, now mostly millennials, increasing by 5 percent after inflation from 2022 to 2025, reaching $155,600. Not everyone agrees with this assessment. A 2025 National Bureau of Economic Research working paper by Moritz Kuhn and José-Víctor Ríos-Rull, using the same 2022 data, contends that younger generations accumulate less wealth than their predecessors at comparable ages.

Additionally, homeownership among 35-to-44-year-olds has decreased, from 66 percent in 1989 to 61 percent in 2022, according to Corinth and Larrimore. The Federal Reserve now estimates that mortgage payments for the median home would consume about a third of median family income, a record in the modern survey. However, the millennial myth surrounding their hardships is gradually dissipating.

Millennials themselves are less pessimistic than the narrative suggests. In a 2023 Federal Reserve survey, 49 percent of millennials reported being financially better off than their parents had been at the same age, compared to 56 percent of baby boomers, according to Corinth and Larrimore's analysis. While there is still a chance that the remaining portion of the generation, still entering its late 30s, may not match their elders' lead over Gen X or that a housing slump could negate the paper gains, for now, the generation once deemed lost has found its footing—except in the realm of homeownership.