It looks like millennials will be able to buy houses after all.
Those born between 1980 and 1994 are set to become part of the richest generation in history, according to the latest Wealth Report by U.K. real estate agency Knight Frank. The group can expect a “seismic” windfall over the next two decades, as $90 trillion of assets move between generations in the U.S. alone.
“When the silent generation (born from 1925 to 1945), the baby boomers (1946 to 1964), and the oldest cohort of Generation X (1965 to 1979), die, £2.5 trillion (roughly $3.1 million) in wealth tied up in their homes will be freed up,” the report reads.
In addition to property, the shares, bonds, and assets previous generations have accumulated will go to millennials. This transfer of equity will make the generation wealthier than all their predecessors.
However, many millennials have been affected by the economic headwinds created by the 2007 financial crisis, the pandemic, Brexit, and the invasion of Ukraine. Some are riddled with economic anxiety and need to work multiple jobs to pay bills. As such, any influx of cash would likely be spent on buying homes, paying off student loans, creating a pension pot, and building credit. It is also worth pointing out that inheritance is largely determined by a family’s financial status, e.g. those with rich parents stand to gain the most.
The massive transfer of wealth could have an equally massive impact on society. Liam Bailey, global head of research at Knight Frank, believes younger generations will actively seek out greener homes, eco-friendly goods, and sustainable investments. Given their track record, he could be right. Millennials and Gen Z are leading the charge in climate change activism, the Pew Research Center reports. Both are talking more about environmental issues than older adults, taking to social media to mobilize and enact change.
It appears the financial shift is already underway, too. Knight Frank’s research found that 75 percent of millennials expect their wealth to increase in 2024, compared to 53 percent in the baby boomer generation, 56 percent in gen X, and 69 percent in the younger gen Z.
The future is looking slightly brighter—for millennials, at least.
Authors
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Demetrius Simms