Monitoring trends for over 70 years

Subject: Age Reversal in Buying Attitudes
February 22, 2019
From: Richard Curtin, Director
The Surveys of Consumers have long documented differences in buying attitudes across age groups.
Traditionally, younger age groups voiced the most favorable views of buying conditions for all types of discretionary
purchases. The differences were comparatively small, but consistent over many decades. That pattern has recently changed.
Consumers under age 35 had viewed buying conditions more
Buying Conditions for Houses
favorably for most of the past half century, but in the past decade,200
younger consumers viewed them less favorably than other age
groups. The gap is widest for homes, followed by vehicles, and 180
160
smallest for purchases of large household durable goods—see the140
charts. Indeed, in the earlier time period, the rank order was from 120
youngest to oldest, but in the past decade, that rank order 100
reversed. In recent surveys, the youngest consumers held the least 80
favorable views, followed by middle age consumers, with the 60
most favorable views held by those over age 55. Moreover, the 40
most recent data indicate that the divergence in buying views 20
19691974
1979
1984
1989
1994
1999
2004
2009
2014
2019
across age groups has increasingly widened. Note that for
18 to 34
35 to 54
55+
household durables, the reverse ordering across age groups
occurred only in the past few years.
The consistent pattern of more favorable attitudes among the young in prior decades was attributed to their relatively greater
material needs as they established separate households, married andBuying Conditions for Vehicles
started families. In the past decade, it has been suggested thatweakened job and income prospects, delayed marriage, the burdenof educational debt, and other factors have reduced their spending. 160
Some observers have suggested an underlying change in material 140
aspirations that have reduced the appeal of home and vehicle 120
ownership. Others have suggested that the baby-boom generation has 100
always been more spending minded than either older or youngergenerations. Some have placed importance on the formative 80
experiences of those who came of age at the time of the financial 60
wreckage left by the Great Recession, making them more cautious 40
1969
1974
1979
1984
1989
1994
1999
2004
2009
2014
2019
about taking financial risks and incurring debt. Finally, many have18 to 34
35 to 54
55+
noted that the muted spending by young consumers has acted to limit
the pace of economic growth. This recognition of the importance ofspending by young consumers has prompted an array of policies to boost their spending such as forgiving student debt andmany other proposals now debated in the political arena.
The Michigan surveys ask consumers to explain why they hold their views about buying conditions. Prices were notmentioned to a greater extent, either negatively or positively, by younger consumers compared with other age groups. Nor
did a host of other reasons show a distinctive profile for younger
Buying Conditions for Durables
consumers, save one. The less favorable views of the young were190
mirrored in their more frequent concerns about the incurrence ofadditional debt. There are many reasons to anticipate this aversion 175
among the young, as has been already mentioned. It is also true 160
that stricter credit standards by financial institutions have also 145
been reported more frequently by younger consumers. The 130
biggest impact has been on home ownership. Among those under 115
age 35, home ownership rates improve slightly in the past few 100
years to 36.2% in 2018, but these figures remain well below the 85
peak of 43.1 recorded by the Census Bureau in 2004 and 2005. 70
1969
1974
1979
1984
1989
1994
1999
2004
2009
2014
2019
The biggest jump in the home ownership rate occurs from age 35
18 to 34
35 to 54
55+to 44; the 2018 rate was 59.8 for those aged 34 to 44, well below
the peak of 69.3 in 2005. Growth in home ownership must
increase by 23.6 percentage points in the years ahead to move the home ownership rate to match the current lower rate forthose aged 35 to 44 of 59.8%.
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