Do you ever wonder why millennials are the demographic that everyone talks about today?
It’s all about the money.
Statistics Canada published some interesting data on Thursday showing that millennials had higher incomes and median wealth than young Gen-Xers at the same age, but also considerably more mortgage debt.
“The study finds that millennials – the most educated generation – had higher household incomes than Gen-Xers or baby boomers when they were the same age. Specifically, household incomes reached $66,500 for millennials aged 25 to 34 in 2016, compared with $51,000 for young Gen-Xers at the same age in 1999,” it said.
“Higher incomes suggest different potentials for saving and wealth accumulation. Median net worth – meaning total household assets minus total debts – was higher for millennials than for young Gen-Xers. Median net worth reached $70,600 for millennials, over one and a half times the level for young Gen-Xers ($42,800). To accumulate wealth, households typically take on both assets and debts over their life course. Although millennials were better off than young Gen-Xers in terms of assets or median wealth, they were relatively more indebted, as they carried considerably more mortgage debt.”
The report said the debt to after-tax income ratio reached 216 per cent for millennials, far exceeding the 125 per cent for young Gen-Xers or 80 per cent for young boomers.
“Though homeownership rates were similar across young generations, millennials who entered the housing market took on considerably more mortgage debt. Median mortgage debt for millennials aged 30 to 34 reached $218,000, over 2.5 times the value of their median after-tax income ($83,200). By contrast, mortgage debt for young boomers ($67,800) was equivalent to their after-tax income. Similar patterns were observed for principal residence asset values across young generations, which were considerably higher for millennials than for young Gen-Xers and for young boomers.”
– Mario Toneguzzi
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