Myth: The recession didn’t affect Millennials like it did Boomers and Gen X-ers!
Fact: Maybe not during the recession, but it has played a large role in how Millennials make their financial decisions today.
Millennials, including these authors, are still spooked by the Great Recession of 2007. As we approach the 10th inning of this economic recovery, the commercial real estate industry is beginning to get a little wary (stay woke, fam).
Many economists, including Robin Bew of the Economist Intelligence Unit and Victor Calanog at Reis, Inc., have predicted an economic downturn will occur in late 2019 or early 2020. A small contingent of economist think growth in this cycle will continue well into the next decade. While some mark today as the calm before the storm, no one knows exactly when that storm will hit. The question remains unanswered how a potential economic slowdown would impact Millennials.
This last recession defined our generation in more ways than people may realize. Older Millennials were left to familiarize ourselves with adulthood during our country’s biggest economic struggle. The market was at its worst when we were headed to college, got our first jobs, or joined the military. Unemployment levels hit a post-war high into the double digits. We were forced to compete for entry-level positions against more experienced, laid-off adults. Millennials, like ourselves, were told we were not qualified enough for the jobs available, and companies weren’t willing to invest the time or effort to train us. It was a grueling experience, but many of us grew stronger from it. It’s no surprise that we have a number of atypical behaviors that research shows is unique to our generation.
Our now notorious habits can be directly linked to what was witnessed or experienced during the recession. We learned the pitfalls of being frivolous and risky as we saw the hardship that friends and family endured due to the financial crisis.
As a result, Millennials have taken on a “monkey see, monkey don’t” mentality. A significant amount of us didn’t plan on moving out of our parents’ house when we graduated college, knowing it may take longer to find a good job that we could support ourselves with. We also didn’t plan to start families in our early 20’s, like many of our parents did, and we’re more likely to wait until our 30’s to buy a home.
We make financial decisions cautiously because it is instinct. In fact, a 2017 study by Legg Mason Global found that 82 percent of Millennials have made investment decisions that were influenced by the Great Recession. This means many of us have chosen a low risk, low reward route to financial security.
From the writers:
Michelle: Millennials didn’t start the fire. The bubble was bursting, as the mortgage market was turning. Millennials didn’t start the fire. No, Millennials didn’t light it, but we’ve been trying to fight it.
Kat: Housing Bubble. George Bush. Banks Bailed Out. Freddie Mac. Fannie Mae. Lehman Brothers. Recession. Credit Markets. Investment Banking. Millennials didn’t cause it.