Are Millennials Secretly Rich?

You've probably heard the jabs about being a millennial. Over the years, we’ve been called everything from lazy, entitled snowflakes to avocado toast-eating spendthrifts. But the most common label has been that of the “broke millennial,” perpetually behind in finances and therefore, life.

“Millennials have been squeezed in a lot of ways our parents weren’t,” says Jill Filipovic, author of OK Boomer, Let's Talk: How My Generation Got Left Behind. “We went to college in record numbers—and took on astronomical student loan debt—only to graduate into a recession where it was difficult to find work. As a result, some of us took lower paying jobs, which had long-term effects on our finances.”

Indeed, the stereotype of the “broke millennial” has largely been true. But new data suggests a different narrative, one that claims the generation has money after all. Millennials are, in fact, wealthier than their parents were at the same age, according to a recent analysis of the 2022 Survey of Consumer Finances (SCF). Researchers at the Federal Reserve Bank of St. Louis analyzed SCF data and found that between 2019 and 2022, the median household net worth of older millennials (born in the '80s) doubled, and the median wealth of younger millennials (born in the '90s) quadrupled.

“We were really surprised by the data,” says Ana Hernández Kent, a senior researcher with the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, who studied the data with her colleague, Lowell R. Ricketts. Previously, their analysis of 2019 SCF data showed that the wealth of older and younger millennials was 9 and 44 percent below expectations, respectively, based on earlier generations at the same age and adjusted for inflation. But just three years later, in 2022, the SCF data showed that the wealth of older and younger millennials rose to 37 and 39 percent above expectations—a significant increase for both groups.

The data makes it sound like millennials are thriving, so why doesn’t it feel that way?

Millennials’ net worth only looks good on paper

In Kent’s analysis, she found that real estate was the main driver of wealth gains for millennials between 2019 and 2022. The reason? Home values appreciated tremendously during this time. According to a report by the Joint Center for Housing Studies of Harvard University, home prices nationwide increased 47 percent (23 percent when adjusted for inflation) between 2020 and 2024. So if you were lucky enough to buy a home before the pandemic, chances are, your home equity—and net worth—increased dramatically.

That’s been the case for Melissa Bell, a 34-year-old who lives in Orlando, Florida. At the beginning of the pandemic, her home—which she purchased in 2015 for $190,000—was worth around $300,000; today, it’s valued at nearly $450,000. On paper, her net worth increased substantially but that doesn’t necessarily make her feel financially secure. “Having the house helps bring my husband and me peace of mind but it doesn’t impact our day-to-day spending,” she says. “At this point, the house is our retirement plan.”

The psychological disconnect between looking rich on paper and actually feeling wealthy in your daily life has been described as “phantom wealth.” The idea is that having assets like a house or a car increases your net worth, but because they aren’t liquid, they don’t make you feel better off in your day-to-day; they can’t help pay for essentials like gas and groceries.

The wealth gap among millennials is the largest it’s ever been

Millennials may technically be catching up financially but we also have greater wealth inequality than any previous generation, according to a recent study. “Millennial wealth is hugely unequally distributed,” says Rob J. Gruijters, a quantitative sociologist at the University of Bristol in England, and the study's lead author. “The top 10 percent of millennials hold close to 70 percent of the generation’s wealth. Meanwhile, the bottom 50 percent of millennials hold less than 2 percent.”

Just like the rest of America, the wealth gap among millennials runs along racial lines. In an analysis of 2019 SCF data, Kent found that white millennial families had $88,000 in median wealth, Latino families had $22,000, and Black families had $5,000. In other words, white millennial families had four times as much wealth as Latino families and nearly 18 times as much wealth as Black families. There are many potential reasons for these disparities but according to Kent, a big one is the burden of student loan debt on millennials of color.

Brianna Gillard, a 33-year-old who lives in Greensboro, North Carolina, has more than $151,000 in student loan debt. She lives at home with her parents to save money. “Over the next two years, my goal is to pay off my consumer debt and student loans, build an emergency fund, and hopefully afford my first home,” she says. “I’ve made progress recently, paying off three credit cards within the past six months, which has been a big step forward.”

Public policies and programs are lacking

On top of student loans, millennials are dealing with rising housing costs, unaffordable child care and healthcare, and low-paying services jobs. To close the wealth gap, it’s crucial for lawmakers to create policies that address these issues, says Gruijters. For example, policies that make it easier for young people to buy homes can help those who started out disadvantaged begin to build wealth.

Whitney Hayes, 37, was able to purchase her first home in Roanoke, Virginia in 2022 in part because she qualified for a Virginia Housing Development Authority grant that helped cover her closing costs (she also received help from her father, who gave her the money for the downpayment). Though she still has student loan debt, she’s finally starting to feel somewhat financially stable. “I just emerged from feeling like I was financially struggling (like within the last few months), so I am on the other side of it—but barely,” she says.

So are millennials really better off than their parents? The thing is: It's complicated. The overall wealth of millennials has indeed increased but it’s more unequally distributed than ever, so if you don’t feel like you’re rolling in it, you’re certainly not alone. It’s also important to remember that numbers don’t always tell the whole story. As Kent put it: “There’s what the data says and there’s lived experience, and sometimes those things can feel conflicting.”