Even though Americans aged 18 to 34 are in the prime of their careers, they’re delaying buying houses, driving, or using credit, according to data released Wednesday by the Federal Reserve Bank of New York. And with just 1.8 million single, baby-boomer households in the United States today, the share of households headed by young adults aged 35 to 44 is not growing fast.
“Today’s older demographic is much more dependent on a family in the home, and in terms of mortgage debt and student loans, they are less of a source of disposable income,” said Steven Rattner, a professor at the Harvard Graduate School of Design.
The decline is especially big when it comes to baby-boomer households. Nearly half, 44 percent, of these households have a child younger than 18, and more than 40 percent have another younger child.
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For comparison, for young, jobless millennial adults (ages 18 to 34), the share of home mortgages is down to 15.6 percent; a student loan debt debt load is down to $22,200, down from $39,000 in 2008; and a share of the household income going to housing and other living expenses has fallen to 8.9 percent from 14.5 percent.
That means less family-support to support their retirement needs if they start pulling double-digit annual family-income increases in the next few years.
“This generation is just getting off from college and getting into jobs, and they have the flexibility,” said Paul Rieckhoff, a senior economist at the Urban Institute, a Washington research nonprofit. “As many of the baby boomers have already paid off their college debt, the burden of paying off their student loans and college loans that will follow is much higher than the boomers had to take.”
Yet even this relatively small increase in support may not mean much in the years to come for millennial households.
Despite the big increases in home loans in recent years, the household income of young, jobless millennial adults, by far the largest age group in the workforce, continues to grow slower than that of the baby boomers. And their share of household income from housing, the largest driver of disposable income growth for households with children, is still lower than in earlier generations.