Decades of rising housing and tuition costs have young adults delaying milestones
WASHINGTON (TND) — The financial landscape for young adults has drastically changed due to inflation, soaring tuition fees, and unaffordable housing. The consequences of these economic challenges, especially for Millennials and members of Generation Z, are evident as they face significant delays in achieving important life milestones.
The latest Census data reveals that 56% of young adults aged 18 to 24 were living with their parents in 2023. To put this into historical context, during the Great Depression in 1940, only 48% of adults aged 18-29 resided with their parents.
Living at home offers a temporary reprieve from mounting student debts, which have reached an average balance of $38,290, according to Experian.
A Bankrate survey found that 59% of individuals burdened with student debt reported significant delays in reaching financial milestones. Gen Zers are more likely to postpone car purchases due to their student debt. On the other hand, Millennials are delaying buying houses and saving for emergencies, explained Ted Rossman, a senior industry analyst at Bankrate.
The survey also revealed that both generations, Gen Z and Millennials, experienced delays in getting married and starting families due to student debt. Approximately one in five respondents cited student debt as the reason for these delays. The impact of this financial burden on various aspects of young adults’ lives cannot be overstated.
Financial hurdles consistently emerge as a significant barrier to marriage. Last year, a Credit Karma survey showed that over half of unmarried Millennials expressed a desire to postpone marriage until they achieve financial stability. Government data confirms a downward trend in marriage rates since the 1980s, with a proportional decline in divorce rates over the past decade.
The soaring costs of education and housing have been a cause for concern for several decades. Inflation hasn’t only become an issue in recent years. Despite gaining significant attention recently, certain costs have outpaced wage growth for decades. Notably, higher education costs have skyrocketed, Rossman noted. Home prices have also surged far beyond the rate of inflation and wage growth over the past few decades.
Navigating their way into adulthood has become a labyrinth of financial challenges for young adults. The impact of inflation, inflated tuition costs, and unaffordable housing has resulted in delayed milestones such as purchasing cars, buying homes, and saving for emergencies. The repercussions also extend to delayed marriage and starting families. The fundamental aspects of young adults’ lives have been significantly impacted by an economic landscape that prioritizes soaring costs over their financial stability and well-being.
In this environment, young adults face the formidable task of balancing financial obligations and aspirations. The consequences of these challenges are seen in the declining rates of marriage and the rise of multigenerational households. As the cost of living continues its upward trajectory, the aspirations and milestones of young adults remain increasingly deferred. The financial burden they carry casts long shadows on their prospects for stability and progress in an uncertain future.
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