More young people in the US are now staying at home to save some cash—but that doesn’t mean they aren’t scoping out the luxury shops.
In recent years, millennials and Gen Z have chosen to live with their parents instead of leaving the nest, thanks to the groups’ pursuit of higher education and delay of marriage, plus soaring rental costs. Now the two generations are opting to use their new disposable income to purchase high-end items, according to a new report from Morgan Stanley.
And their shopping habits are definitely having an impact: The trend has helped drive sales and increase the appeal of goods such as purses, watches and jewelry across the luxury industry, according to Bloomberg.
“When young adults free up their budget for daily necessities, they simply have more disposable income to be allocated to discretionary spending,” Edouard Aubin, an equity analyst at Morgan Stanley, said in the report. “We see it as fundamentally positive for the [luxury] industry.”
According to recent US Census data, nearly half of young Americans between the ages of 18 to 29 are living with their ‘rents, the highest percentage reached nationwide since 1940—when the country was rebuilding after the decade-long Great Depression.
One of the main reasons millennials and Gen Z are opting to stay put? The two age groups are largely delaying taking the next step in their relationship and having kids to achieve financial security before taking the plunge. 37 percent of young people were holding off on getting married or getting engaged because they want to ensure their debts were paid off first, according to a 2020 New York Post poll. Another 29 percent say they delayed purchasing their first home for the same reason.
Young adults across the pond aren’t strangers to this trend. Morgan Stanley found the number of UK residents aged 15 to 34 residing at home has increased to 42 percent, up from about 35 percent in 1999, despite the country dealing with an economic recession. More young high-income UK shoppers are also fueling luxe goods sales to increase their engagement on social media.
And now is the time to splurge. Since the summer, American shoppers have been hopping on flights to Europe to take advantage of the sinking pound and euro, getting more for their dollar across the region—and making pit stops at their their favorite retailers to score a deal. The young adults are then reselling the same investment pieces for a profit to combat rising inflation. They can use the kickback to continue the cycle and purchase even more designer goods—perhaps as a gift for their parents this holiday season.