The teens and 20s are always a tricky time for young adults trying to launch careers, move into their own households, figure out their finances, and generally establish themselves as grown-ups. And when an economic crisis hits in the middle of the process, it can have significant and long-lasting impacts.
The financial slump known as the Great Recession is no different. Recent economic troubles have left young people reaching some milestones of adulthood at slower rates, according to an analysis released last month by Pew Research. At the same time, however, the economic climate seems to have helped lower the average debt held by young adults.
In 2011, young adults formed independent households at rates decidedly lower than in the past. For every 100 people under the age of 35, there were just 33 households, down from 40 in 2001, the Pew research found. The decrease could reflect a greater number of young people living with parents or with roommates.
Homeownership also fell among younger groups. In 2007, 40 percent of adults under 35 owned their own home; four years later, that number had dropped to 34 percent. In the population overall, however, homeownership dropped just 2 percentage points over the same period, from 74 percent to 72 percent.
The fall in homeownership contributed to a significant decrease in the median debt held by young people. Between 2007 and 2011, the median debt of those under 35 fell nearly 30 percent, from $21,912 to $15,473. Among those 35 and older, however, the median debt fell less than 8 percent, from $32,542 to $30,070.
The fact the fewer young people owned homes in 2011 certainly helped push down their total debt levels. But non-mortgage debt also fell more sharply for young adults than for their older counterparts. In 2011, fewer people under 35 held credit card debt or car loans than in 2007.
Student loans, however, continued to be a growing burden. In 2001, just 26 percent of households had student loan debt; by 2010 that number was up to 40 percent. And the median debt held by these households rose from $10,417 to $13,410.
Households headed by someone with at least a bachelor's degree, also have higher median debt than less educated households.