Pandemic Homeowners Are the New Envied (and Hated?) Elite

The pandemic years transformed wealth in the US, sowing the seeds of a new form of inequality.

The divide is clear when describing the state of family finances in 2024. Household balance sheets, in aggregate, are arguably in the best shape ever. At the same time, borrowers are getting squeezed as high interest rates make servicing new debt more challenging. This sets up a difficult balancing act for the Federal Reserve as it contemplates policy changes.

A blog post published last week by the St. Louis Fed provides some important context. The authors looked at the median household wealth of people based on the decade in which they were born and compared it with where history suggests they should be. For example, how are older millennials born in the 1980s doing compared with past generations when they were the same age.

Families Richer Than History Suggests in 2022

In 2019, those older millennials along with cohorts born in the 1950s, 1960s and 1970s had roughly the net worth one would expect for their age, based on historical averages.

By 2022, the picture had shifted dramatically. Median family wealth for the 1980s cohort was 37% higher than expectations, a touch below the gains seen by baby boomers born in the 1950s. Millennials, on average, are now pretty rich for their age.