The Great Recession ruined credit scores, lessened collective and familial wealth and sent thousands of home into foreclosure; but in the aftermath, millennials have less debt and are in better financial shape. The Pew Research Center examined the Federal Reserve Board and other government data and concluded that Generation Y shed more debt, but also own fewer homes and cars.
The report found that from 2007 to 2010, the median debt of households headed by a millennial younger than 35 decreased by 29 percent, compared to an 8 percent decline among households headed by adults 35 and older. These numbers were also spurred by a 9 percent decrease in credit card debt.
All of these statistics indicate a “broader societal shift toward delayed marriage and household formation that has been under way for decades,” according to Pew.
Other important findings include:
- Younger households are breaking records. “The share of younger households holding debt of any kind fell to 78 percent, the lowest level since the government began collecting such data in 1983.”
- Sallie Mae is still the devil. Younger households are burdened with more student loan debt after the recession. In 2010, households headed by someone under 35 had 40 percent student loan debt, which is up from 26 percent in 2001 and 34 percent in 2007.
- Home ownership is in swift decline. Younger households owning their principal residence fell from 40 percent in 2007 to 34 percent in 2011.
- Owning a car is a privilege that is accompanied with debt, plus interest. In 2007, 44 percent of younger households had vehicle debt; this has declined to 32 percent in 2010.