I have covered economics for 11 years now, and in that time, I have come to the realization that I am a statistic. Every time I make a major life choice, I promptly watch it become the thing that everyone is doing that year.
I started college in 2009, in the era of all-time-high matriculation rates. When I moved to a big coastal city after graduation, so did a huge crowd of people: It was the age of millennial urbanization. When I lived in a walk-in closet so that I could pay off my student loans (“The yellow paint makes it cheerful!”, Craigslist promised), student debt had recently overtaken auto loans and credit cards as the biggest source of borrowing outside of housing in America.
My partner and I bought a house in 2021, along with (seemingly and actually) a huge chunk of the rest of the country. We married in 2022, the year of many, many weddings. The list goes on.
I am no simple crowd follower. What I am is 32, about to be 33 in a few weeks. And there are so many of us.
If demographics are destiny, the demographic born in 1990 and 1991 was destined to compete for housing, jobs and other resources. Those two birth years, the people set to turn 33 and 34 in 2024, make up the peak of America’s population.
As the biggest part of the biggest generation, this hyper-specific age group — call us what you will, but I like “peak millennials” — has moved through the economy like a person squeezing into a too-small sweater. At every life stage, it has stretched a system that was often too small to accommodate it, leaving it somewhat flabby and misshapen in its wake. My cohort has an outsized amount of economic power, but that has sometimes made life harder for us.
When millennials gripe that they get blamed for everything, in other words, the accusers might be onto something.
Meet the Peak Millennial
The 1990 and 1991 babies’ influence in the consumer economy has often been overt.
While it is difficult to pinpoint the spending habits of just two birth years, this group makes up a sizable chunk — about 13 percent — of the generation that marketers have been trying to woo for more than a decade. Millennial vacationing and dining-out habits caused research firms to endlessly tout the rise of the “experience economy.” We’ve been accused of killing McMansions and formal dress codes, but we helped to fuel the rise of tiny homes and athleisure.
“There are a lot of them — their parents may have said they’re very special, but there were a lot of these very special babies,” said Neil Howe, who coined the term “millennial.” “They create a lot of pressure. Whatever they are buying, a lot of people are buying it.”
That economic influence extends well beyond day-to-day consumption. When peak millennials went to college in 2009, the enrollment spike was so significant that community colleges that had once prided themselves on welcoming all students started to turn away applicants.
When that group began to graduate and moved for jobs, the population of metro areas like New York City, San Antonio and San Francisco jumped to new highs, leading to a fierce contest for a limited supply of apartments in some places — the Bay Area in particular.
That re-urbanization boom came “when those millennials were coming of age, getting their first jobs, looking for housing, looking for roommates,” said Igor Popov, chief economist at Apartment List.
Now, the people who will turn 33 and 34 this year are at another crucial juncture in their financial lives: They are leaving cities, starting families, and buying houses. And while some of those changes have been sped up by the pandemic, the demographics alone help to explain why today’s economy is performing in often surprising ways.
Housing Shift
In 2017, a real-estate mogul birthed a meme when he suggested that millennials were failing to buy homes because they were squandering their money on avocado toast and fancy coffee. Outrage ensued. The New York Times published a fact check.
But like many a flip statement that strikes a deep societal nerve, the toast comment took off for a reason. People really were wondering why millennials weren’t buying houses in greater numbers.
Much of the answer was unquestionably that the generation had just experienced a grueling entry into the labor market in the aftermath of the worst recession since the Great Depression. But at least a small part was likely simpler. While we often talk about millennials as one monolithic group, the biggest part of the generation — peak millennial — was still in its mid-20s in 2016 and 2017. That’s on the young side for homeownership.
Today’s population of 30- to 34-year-olds is about 700,000 people larger than the group between ages 35 and 39.
Now, those people are increasingly ready to buy.
Millennials snapped up houses in 2020 and in 2021 as the Federal Reserve cut interest rates to near-zero. That was partly about the pandemic: People wanted space amid lockdowns. But it also reflected that a big group of people were finally far enough along in their economic lives to buy property.
“Just the demographic story is a big one to explain why homeownership went down in the 2010s, bottomed out in 2016, and now we’re seeing this boom in suburban demand that the housing market is grappling with,” said Mr. Popov of Apartment List.
And the wave of millennials now trying to buy could contribute to a topsy-turvy housing market for years to come.
The median age for first-time home buying is typically in the mid-30s, according to the National Association of Realtors. Peak millennials are only now approaching that age range.
Given the sheer generational numbers, “the demand for entry-level single-family homes should remain high for the rest of the decade,” economists at Fannie Mae noted in a recent analysis.
But hot demographic demand is colliding with very limited housing supply, following years of under-building after the 2009 recession. That has helped to push prices to record levels — where they are hovering even as the Fed tries to slow the economy with higher borrowing costs. And steep prices are combining with elevated mortgage rates to make the market painfully unaffordable, including for the starter homes many peak millennials would love to buy.
College Echoes
Today’s crazy housing market is not the first time 32- and 33-year-olds have found themselves forced to compete with one another for resources — nor will it be the first time they helped to reshape a market with lasting consequences.
The sub-generation faced its first real economic scramble in 2008 and 2009, when they graduated from high school and, in many cases, tried to go to college.
The group made up a huge entering class in its own right, but thanks to the Great Recession, older people with few job opportunities were also flooding into college classrooms to weather the downturn.
Enrollment rates spiked. The population of people in college peaked in 2010, the year after my class matriculated.
“The big strain that the students felt was to get classes and to get resources,” said Robert Kelchen, a professor who studies higher education at the University of Tennessee.
Tuition rates climbed sharply at public schools as state support waned during the downturn, though they also nudged steadily higher at private colleges. The ratio between student debt burdens and starting salaries got worse.
But demand for college seats has begun to reverse as demographic trends pair with a cultural shift away from higher education. Less selective colleges, which couldn’t add seats fast enough in the late 2000s, are now closing and merging.
It’s not just colleges. Another age-old institution could struggle as peak millennials age: wedding venues. The millennial generation’s sheer numbers have managed to prop up demand in the wedding industry even at a time when marriage rates overall have been steadily falling, said Shane McMurray at the Wedding Report.
But a post-lockdown wedding boom from 2022 is already fading, and will likely recede further as my agemates move past top marriage years. Mr. McMurray thinks business will stay steady for some time, but eventually, “it’s going to impact the industry pretty significantly.”
Baby Boom Precedent
Thirty-three-year-olds could also whipsaw the job market.
Throughout much of the 2010s, employers had more entry-level applicants than they knew what to do with. When peak millennials graduated from high school in and around 2009, they were a flood of potential workers pouring into a…
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