katleho Seisa / Getty Images

katleho Seisa / Getty Images

A report released earlier this year by the Urban Institute substantiated what many people already suspected: Young American adults today are more likely to live with their parents longer than previous generations and less likely to purchase their own homes when they do leave. They are also more likely to delay getting married and having kids, and less likely to build adequate savings.

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According to the Urban Institute report, the average age young adults left their parents’ homes rose from about 23 years old in the 1990s to a range of 26-27 in the 2010s. The share of young adults moving out of their parents’ place and straight into homeownership has also steadily declined.

A separate 2024 survey from GOBankingRates found that around 30% of adults aged 18 to 44 have no financial savings at all. Nearly 40% have less than $50,000 saved up, which is much less than financial experts recommend.

Cultural factors contribute to these trends. A joint study conducted last year by Close Up, the Generation Lab and the Millennial Action Project researched what the American Dream means for young adults between the ages of 18 and 34.

One thing the study found was that marriage, owning a home and having children are “lower priorities than they were in the past,” while “being happy and fulfilled and having the freedom to make significant life decisions” top the list of important elements of the American Dream for younger adults.

But financial factors play a role as well. Here are four financial factors that have contributed to why many Gen Zers and millennials are behind on certain life milestones.

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Boomers who have millennial and Gen Z children will remember the double-digit inflation of the late 1970s and early 1980s that made it all but impossible to get ahead financially. Similarly, young Americans today have seen consumer prices rise at their highest rate in decades. Inflation extends to home prices, which have hit all-time highs over the past couple of years and prevented many millennials and Gen Zers from buying a home.

Tighter Lending Standards

This also has impacted the ability of young adults to buy homes. Following the financial meltdown of the late 2000s, banks and other lenders raised the bar on who qualifies for loans and how much they can be approved for. It hasn’t helped that mortgage rates are much higher now than they were a few years ago, which makes it even more difficult to get a loan.

Student Loan Debt

Another contributing factor is the high burden of student loan debt younger people carry. As previously reported by GOBankingRates, a study by the Federal Reserve Bank of New York found that student loan debt in the U.S. reached a “staggering” $1.7 trillion in 2020. Millions of young Americans enter adulthood strapped with thousands of dollars in student loans that hinder their ability to build wealth, buy homes and even start families.

Stagnant Wage Growth

According to a recent report from Junior Achievement, current wages have not kept up with inflation — even with unemployment hovering near record lows and many employers in desperate need of workers. The emergence of AI also has played a role as more jobs get taken over by machines. The disparity between income growth and the rising cost of living has made it increasingly difficult for millennials and Gen Zers to make financial progress.

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This article originally appeared on GOBankingRates.com: 4 Financial Factors Behind the Delayed Achievement of Life Milestones by Gen Z and Millennials

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