A record number of Americans aged 18 to 29 haven’t moved out of their parents’ homes — and are raking in the savings.
What might’ve been rent money is significantly being used on niceties — fueling a boom in luxury goods, an analysis by the bank Morgan Stanley has found.
Close to 50% (approximately 48, to be precise) of under 30-year-olds still live at home in the US, the highest rate since the Great Depression, according to the new Morgan Stanley research, Insider reported.
The situation is proving hugely beneficial to retailers, as many are using would-be housing funds on handbags, watches and jewelry.
“When young adults free up their budget for daily necessities (e.g. rent and grocery), they simply have more disposable income to be allocated to discretionary spending,” the Morgan Stanley report said, Bloomberg reported. “We see it as fundamentally positive for the [luxury] industry.”
Another boon for sellers of expensive watches and purses, analysts found, is social media.
“This is of course not the only reason luxury-goods consumers are getting younger in the West (social media playing also an important part) but we see it as fundamentally positive for the industry,” they wrote.
These factors likely played a role in the US overtaking China as the top destination for luxury Swiss watches in 2021, and increasing sales for Tiffany and Cartier products, which have reported recent rises in their US sales, Bloomberg noted.
As for the reason so many young people are choosing not to get a home of their own, it’s likely not because they want to have more money for pricey knicknacks, but because the rent is too damn high. Gen Z and millennials getting married later, and enrolling in higher-education more frequently, have also had an impact.
The UK is seeing a similar pattern: Across the pond, approximately 42% of 34-year-olds still live at home. In 1999, that number was 35%.
Ex-Brit turned Manhattan resident since 2008.