Young Americans are richer than ever as household wealth of under 40s rises by staggering number

Household wealth for Americans under 40 is up almost 50 percent from before the pandemic, new numbers have revealed.

Brought to light by data from the Federal Reserve Board of Governors, the unforeseen development shows how young Americans have somehow managed to increase their financial security.

This comes on the heels of months of economic uncertainty wrought by the coronavirus, during which the average under-40 net worth fell to about $167,000.

In the 48 or so months since, that number has risen to $259,000, after reaching a record high of $281,000 in early 2022. That accounts for a rise of 49 percent - a number never before achieved since the demographic was first tracked in 1989.

This includes bounce-backs seen in the wake of recessions like the one that erased millions from US bank accounts in 2007, and net worths of older households also tabulated within this span. 

Millennials, however, rose the fastest, researchers said - laying bare a perhaps unexpected consequence of the country's healing economy.

Household wealth for Americans under 40 is up 49 percent from before the pandemic, new numbers show. It comes on the heels of months of uncertainty during which the average net worth fell to $167,000. It now sits at $259,000, after hitting a peak of above $280,000

Brought to light by data from the Federal Reserve Board of Governors, the new numbers show how young Americans have somehow managed to increase their financial security, even when faced with a historic recession-like event (stock image)

'No other age group has seen anywhere near this level of wealth accumulation during and after the pandemic,' wrote analysts from the Center for American Progress, a DC-based research group, of the recent rise.   

'Looking specifically at millennial households - those born from 1981 to 1996 - their inflation-adjusted wealth more than doubled during this period,' authors added.

'This column examines the latest data from the Federal Reserve and explains how younger households saw faster wealth gains during the pandemic than older household groups.'

The bulletin went on to disclaim how the recent wealth gains come as  'a stark departure from the past,' due to average wealth for younger households previously staying flat for decades.

The pandemic, however, clearly threw a monkey wrench into this trend, as the data gathered by the body who oversees the Federal Reserve Banks and helps them implement monetary policy indicates.

It shows how the average wealth of households under 40 and over 28 was about $259,000 in the fourth quarter of last year - a rise that came in the face of rising housing costs and persistent inflation.

Still, older Americans were found to be more monied than millennials, after experiencing similar wealth gains during and after the respective recessions they lived through at a similar age. 

Citizens belonging to Generation X, who were between 27 and 42 years old when the Great Recession broke out, saw their wealth swell by only 4 percent by comparison, during the four years that followed the catastrophic financial event.

It comes as Americans have complained about the rise of food prices in general with spiking inflation over the years - consequences of Covid that millennials have apparently navigated better than their older counterparts

The new numbers show how millennials have weathered the four-year storm created by the pandemic better than their contemporaries, with an impressive bounce back never before seen in history

Baby Boomers, meanwhile, who were between 26 and 44 at the start of their recession in 1990, saw their real wealth increase by 46 percent in the four years afterwards.

Both numbers fell considerably short of the 49 percent achieved by the generation above Gen Z, who were born from 1981 to 1996 and were thus between 23 and 38 years old just before the pandemic was called in 2019.

While their household wealth burgeoned, their average wealth adjusted to inflation rose an even more pronounced 101 percent, doubling from the end of 2019 through the end of 2023.

After reaching a peak of about $280,000, the numbers have since fallen slightly due to still-stubborn inflation and rising interest rates - but even so, remains an impressive 49 percent above its pre-pandemic peak. 

This shows how millennials have weathered the four-year storm created by the pandemic better than their contemporaries, both when speaking historically and looking at the present. 

As for why, researchers at the Center for American Progress said it is simply because younger Americans are enjoying the fruits of a phenomenon stemming from a low unemployment rate and a simultaneous rise in wages. 

As for why, researchers at the Center for American Progress said it is simply because younger Americans are enjoying the fruits of a phenomenon stemming from a low unemployment rate and a simultaneous rise in wages

Still, older Americans were found to be more monied than millennials, after experiencing similar wealth gains during and after the respective recessions they lived through at a similar age

As proof, researchers produced numbers associated with the median inflation-adjusted wages for workers aged 25 to 34 between Q4 2019 and Q4 2024, which grew 2.9 percent within that span compared with 2.1 percent for workers of all ages. Pictured: Employees work on the sports themed 11th floor at the JPMorgan Chase offices in Houston in 2021

This, authors wrote after the numbers were made public last week, has made it easier for millennials to accumulate wealth, even with the historic volatility they have had to live through. 

As proof, researchers with the Washington-set institute produced numbers associated with the median inflation-adjusted wages for workers aged 25 to 34 between Q4 2019 and Q4 2024, which grew 2.9 percent within that span compared with 2.1 percent for workers of all ages.

In conclusion, the data from the federal reserve demonstrates how younger households could be on the cusp of a period of success, though that remains to be seen as  factors like income growth and financial security continue to take hold.

In the interim, a uniquely robust and equitable economic recovery has taken place, showing that the US - despite still grappling with inflation and rampant housing costs - is currently on the mend.