Millennials Didn’t Kill the Economy. The Economy Killed Millennials.

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Millennials aren’t doing in the economy. It’s the economy that’s doing in Millennials.

My history with the accused goes back several years.

In 2012, I published a column in The Atlantic with Jordan Weissmann, now a writer at Slate, called “The Cheapest Generation.” That headline-which got us in trouble because it was the only thing most people read-was a bit of a misdirection. The deeper question of the piece was whether the Great Recession might permanently reduce young people’s taste for houses and cars-two of the most vital engines of the economy.

For years, various outlets, including The Washington Post and the Pew Research Center, continued reporting that young people were buying fewer cars and houses than those in previous generations at a similar point in their life. In 2016, about 34 percent of Americans under 35 owned a house; when Boomers and Gen Xers were under 35, about half of them did.

But the fact that young people are buying fewer houses and cars doesn’t prove that they want fewer houses and cars. It might mean they simply can’t afford them. That latter conclusion is now supported by research from the Federal Reserve.

Fed economists found that the depressed rate of homeownership among Millennials was entirely about income and affordability. Young Boomers and young Gen Xers made significantly more money at a similar point in their life cycle, they said, and controlling for income and employment wiped out all generational differences.

Just as important, homes in the United States are less affordable than they used to be. According to the Joint Center for Housing Studies of Harvard University, the typical sale price of an existing single-family home in 2017 was 4.2 times greater than the median household income; that’s 30 percent higher than in 1988. It’s even worse in some cities. Since the late 1980s, price-to-income ratios have more than doubled in metro areas such as Miami, Denver, and Seattle. In San Francisco, the median house price doubled in just five years to more than $1.6 million. That’s a lot of foregone avocado toast.

On the car front: News reports sometimes find that the average age of new-car buyers is quickly rising, which makes it sound like young people are ditching their ride. But as the Fed economist Christopher Kurz has shown in several studies, that factoid is somewhat misleading. Young people actually buy the same number of cars per capita today that they did in 2005, at the height of the housing bubble. The average age of car buying is going up almost entirely because Americans older than 55 are buying more new vehicles than they were 20 years ago. In 1995, Americans over 55 bought about one-third of all new cars. Today they’re buying almost two-thirds.

It’s also true that Millennials spend less than previous generations on transportation. But everybody is spending less; total transportation spending has declined as a share of the typical household’s budget by almost 5 percent in the past 30 years, according to the Fed. Perhaps that’s because people hold on to their car for longer, or own a more efficient car that requires fewer tune-ups. Or maybe that’s a result of the declining cost of new vehicles under the North American Free Trade Agreement, which shifted some auto-manufacturing work to Mexico.