A record number of Americans ages 18 to 29 haven’t moved out of their parents’ homes — and are adding to savings.
An analysis by bank Morgan Stanley has found what rent money could be used for – crucially – is being used to fuel a boom in luxury goods.
Close to 50% (about 48, to be exact) of people under the age of 30 still live at home in the US, the highest rate since the Great Depression, according to new Morgan Stanley research. Insider reported,
The situation is proving to be extremely beneficial for retailers, as many are using housing funds on handbags, watches and jewelry.
“When young adults free up their budgets for daily necessities (such as rent and groceries), they have more disposable income for discretionary spending,” said a Morgan Stanley report. Bloomberg reported, “We see this as fundamentally positive for [luxury] industry.”
Another boon for sellers of expensive watches and purses, analysts found, is social media.
“Certainly this is not the only reason luxury-goods consumers are getting younger in the West (social media is also playing an important role) but we see this as fundamentally positive for the industry,” he wrote.
Bloomberg said these factors likely played a role in overtaking China as the top destination for luxury Swiss watches in 2021 and boosted sales of Tiffany and Cartier products, which recently reported increases in their US sales. Is.
The reason why so many young people are choosing not to own a home is likely not because they want more money for expensive items, but because rents are too high. Gen Z and millennials marrying later, and enrolling in higher education more often, have also had an impact.
The UK is seeing a similar pattern: across the pond, around 42% of 34 year olds still live at home. In 1999 this number was 35%.