Although U.S. economy experienced a sharp recession last year due to Covid-19 pandemic, American millennials (born between 1981 and 1996) managed to double their assets in less than four years. According to the latest Fed report, which tracks American wealth through the third quarter of 2020, millennials now hold more than $10.3 trillion in assets.
However, despite the recent bounce, millennials hold less than 8 percent of total assets (estimated at $132.4 trillion). As shown by the chart below, baby boomers (born between 1946 and 1964) are still in possession of more than 50 percent of total assets.
In the meantime, American millennials also hold $4.3 trillion in debts, almost the same level as for baby boomers, namely $4.7 trillion (despite they hold $66.6 trillion in assets). Looking at millennials, figures show that most of this debt is concentrated in consumer loans, which is usually associated with higher debt service costs than asset-secured obligations such as mortgages. The latter have been very popular among baby boomers who still hold the lion’s share of mortgage debt with 38.2 percent. They can benefit from refinancing in a context where borrowing rates recently hit the lowest level on record.
Finally, on the positive side, millennials are enjoying rapid gains in net worth. Between the third quarter of 2016 and the third quarter of 2020, the aggregate net worth of those Americans increased by 114.5 percent, while the net worth of baby boomers saw a gain of only 23.3%. Stock market gains pushed millennial net wealth to the largest share in history, surpassing $5.9 trillion.