Generation X: The Reverse Goldilocks Generation

© Kevin Dooley, 2014
© Kevin Dooley, 2014

They hadn’t entered the market early enough to have established equity before the Great Recession. They also weren’t born late enough to be able to watch and observe the effects of the housing market crash in order to head into the market with the follies of those before in mind. No, they were in just the wrong place at the wrong time. They are Generation X, and they are the generation that bore the full brunt of the financial crisis just as they entered the world of homeownership.

Generation X, defined as those born in the 70s and early 80s, began to exit their young adult years at the turn of the millennium into high interest rates and banks more than willing to loan the money to cover them. After all, the 90s technology boom was still exploding and the American dream of homeownership hadn’t yet been soiled – many members of Generation X headed into their first mortgages boldly, with the optimism of the prosperous generation that had raised them.

Unfortunately, when the 2008 market crash hit, many of those boldly purchased homes saw enormous drops in value, leaving many Generation Xers under water. And unlike the boomers that had long since established equity enabling them to bounce back, many of those Xers lost all that they had. After all, an investment into a home had seemed like a no-brainer just a couple of years before.

So, with the trauma of the late 2000s still fresh in their mind and wallets, the Xers are now heading into middle age with an understandable chip on their shoulders. 9 million of their number were directly affected by foreclosures between 2006 and 2014, and 1/3 of that number doesn’t expect to ever return to homeownership, according to a study conducted by the National Association of Realtors. There are 3 million more renters in their 30s and 40s today than in the same age group 10 years ago; homeownership for that age group is currently sitting at a three-decade low.

With all of that said, there are some positives that Gen Xers can look toward to envision a brighter financial future than what they’ve lived through. For one thing, they have more spending power than any other generation, according to data from American Express. Though the smallest generation in numbers, Xers make up 31% of consumer spending. For another, spurred by an emphasis on higher education, marriage was never an immediate goal for Gen Xers as compared to those before them. Those two factors combine to highlight a generation currently heading into mid-life with a relatively young marriage and family and a willingness to contribute to the economy, which is recovering rather well. At this point, with interest rates at all-time lows and the insanity of the past decade finally coming to settle, many Xers might finally see the appeal in homeownership again now that the markets are finally shifting their tune.

Generation X was a transitionary generation in terms of living with technology. They grew up in the real world and quickly became enamored with the advanced technology that they began to use in adulthood. As such, they also have the unique generational advantage of being able to dabble in both worlds. In terms of heading back into homeownership, this ability to match the business savvy of boomers while also outdoing millennials at their own game in the digital house search is something that Xers can be proud of.

Much has been made of the boomer transition into retirement age without actual retirement, and even more about the advent of the vast wave of millennials entering the workforce. Just as they were left to their own devices in childhood as latchkey kids, the middle-aged Xers are again finding their struggles ignored by financial and other media in favor of more dramatic fare in their older and younger counterparts. Xers have had a tough time in the world of homeownership, that much can be said for sure. But while the world’s eyes are elsewhere has always been where Xers thrive, and the current market upswing is a perfect opportunity for the MTV generation to finally get their groove back.