Millennials' wealth falls further behind gen X, baby boomers as real estate plunges

financialpost.com:

Millennials’ wealth has been falling further behind other generations, according to Statistics Canada.

Over the past year, millennial households have seen their wealth drop 6.48 per cent to $493,423 per household, according to the latest Statistics Canada data for the second quarter.

In comparison, generation X, baby boomer and pre-1946 households became even wealthier, with their net worth growing to $1,485,654, $1,397,609 and $528,699, respectively.

Millennials were also the only generation that saw their financial assets decline, slipping by 0.27 per cent year-over-year to $241,958 per household, compared to all households, which saw a 5.32 per cent increase.

It is primarily real estate that has caused millennials’ net worths to tumble, experts say. The data showed millennials’ real estate assets have plunged nearly nine per cent since last year, compared with the two per cent drop across all households.

Maria Solovieva, an economist at Toronto-Dominion Bank, pointed to recently changing home values having a disproportionate impact on millennials.

For example, those who purchased homes when interest rates were low, in 2020 and 2021, have seen their homes’ values decline since the first quarter of 2022. The most recent data from the Canadian Real Estate Association showed the benchmark home price fell from a peak of $852,000 in March 2022 to $713,200 in September 2024.

Meanwhile, older Canadians who have owned their homes for decades have seen their properties skyrocket in value over a much longer period.

Carrie Freestone, an economist at Royal Bank of Canada, said millennials who aren’t already homeowners might be reluctant to enter the housing market right now, given relatively high housing prices and interest rates.