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Have We Reached Peak Millennial?

The subject of generational gaps is now mainstream, with “OK Boomer” and entitled children memes proliferating online. Yet, there remains a lack of credible academic research on the subject. Most generational “experts” are nothing more than youth marketers or political pundits whose generalizations should be viewed with skepticism. However, there is much more to generational theory than exploiting consumer habits or predicting political leanings as population and demographics has implications for real estate.

A generation can be defined as a society-wide peer group born over a period that is roughly the same length as the passage from youth to adulthood (20-25 years). The following is a breakdown of American generations according to William Strauss and Neil Howe, academics who coined the word “Millennial” in 1987 when children born in 1982 were scheduled to graduate high school in 2000, at the turn of the millennium.

A key assumption of the Strauss-Howe generational theory is that a person’s goals, values, and attitudes change as they age through four stages of the human life cycle: childhood, young adulthood, mid-life, and elderhood. These four phases make a saeculum which is roughly the human lifespan upon which the human population has completely turned over.

Thus, the critical aspect of the Strauss-Howe generational theory is that groups of people born in close time proximity to one another share a persona due to shared experiences at shared human life cycle points, specifically as children and young adults. This creates common beliefs and behaviors, and a keen awareness of others within their generation. Generational personas are fundamentally different than those preceding or following because each generation has no meaningful physical interaction or shared memory of individuals beyond a saeculum or 80 years (Great-Great-Grandparents, for example).

Viewed this way, at any given point in time, there are constellations of generations at different stages of the human life cycle along the current existing saeculum.

The below example examines the childhood life stage for each cohort of the present saeculum.

One of the most cited statistics in real estate is that of population. A common misconception is that population growth is a given or is a naturally occurring phenomena. But every Gen Z member has been born and that generation is still a smaller cohort than that of the Millennials. In fact, the Millennial cohort is currently the largest as the Boom generation continues to shrink and Gen X begins to enter retirement. The following population pyramid shows the relative size of the generations that make up the current saeculum. It is important to note that generations have ranges and being a part of a generation does not create one monolith.

CONCLUSION

The Millennial Generation is the largest in U.S. history and as they enter their peak earnings years, they are poised to reshape the economy. This will have implications for consumer demand, the housing market, and the overall economy for decades to come.

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Thomas Galvin is the Director of Research for Stream Realty Partners’ Southwestern Region. He is a real estate economist with a focus on understanding and explaining macroeconomic trends through a commercial real estate lens.

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