Bank of America internal data shows a “significant gap” in spending has opened recently between older and younger generations. While Baby Boomers and even Traditionalists are ramping up spending, Gen X, Gen Z and Millennials are cutting back as they grapple with high housing costs and looming student debt payments. “It’s fairly unusual,” David Tinsley, senior economist at the Bank of America Institute, told CNN in a phone interview. Overall, household spending dipped 0.
“That can’t be the whole story,” Tinsley said of the cost-of-living adjustments. To explain the drop in spending by younger Americans, Bank of America pointed to high housing costs. In recent years, rental rates spiked, home prices soared and mortgage rates surged. Younger Americans are also much more likely to move than older ones. “The people who do move are really facing quite significant cost increases,” said Tinsley.