This post first appeared at Demos blog.
It’s not about smart phones, selfies or social media. Millennials aren’t making some of life’s biggest purchases because we’re broke. As James Carville might say, “it’s the economy, stupid.”
Reading the money pages of popular publications as a millennial can be infuriating. Every other article seems to stumble through clumsy speculation about my generation’s financial decisions, as if they’re so mysterious.
A recent article for The Atlantic calls millennials “The Cheapest Generation” and expends more than 2000 words to explain “why Millennials aren’t buying cars or houses, and what that means for the economy.”
“The largest generation in American history might never spend as lavishly as its parents did — nor on the same things,” it reads. “Since the end of World War II, new cars and suburban houses have powered the world’s largest economy and propelled our most impressive recoveries. Millennials may have lost interest in both.”
The word “debt” appears only once throughout the entire piece.
The suggestion that millennials are forgoing major financial decisions, like buying a car or first home, because of generational values is a stretch, and an unnecessary one — especially in the presence of consistent, reliable economic data that shows we’re currently just too broke, saddled with student loan debt and low-wage jobs, to buy big-ticket items.
In fact, nine in 10 millennials say they want to own a home but, nationwide, less than half of for-sale homes are within reach of the median-income millennials.
The median annual of income of adults 25 to 34 years old with a bachelor’s degree is nearly $50,000 annually, according to U.S. Department of Education. Despite that sad stat, millennials still find a way make up just over nearly a third of recent homebuyers. And what’s clear is that the millennials who bought homes can better afford to do so. The National Association of Realtors found that the median income for homebuyers under 33 was $73,600, which is — of course — significantly higher than that of most millennials.
None of this data is particularly new or particularly hard to find. So why the insistence by journalists and analysts on a cultural explanation for millennial buying trends when more likely factors are in plain sight?