- Young adults aged 22–27 face stagnant wages and high underemployment, limiting income growth and career stability.
- Over 41% of recent college grads are underemployed, even in high-demand fields like STEM.
- These economic constraints delay household formation and curb consumer spending, posing risks for multifamily, retail, and office real estate.
A Generation Falling Behind
According to GlobeSt, today’s young adults are entering the workforce under difficult conditions. Despite earning degrees, many face limited wage growth and reduced job prospects. According to the Federal Reserve, these trends are slowing their transition into independent adulthood.
In fact, wages for recent grads have barely changed in over 30 years. In 1990, the median wage for college grads aged 22–27 was $56,642 in today’s dollars. By 2024, it had only reached $60,000. That’s a 5.9% increase over three decades—well below inflation.
By the Numbers
The cost of living has climbed sharply. A dollar in 1990 now requires $2.36 to match its purchasing power. Meanwhile, wages at the lower end have actually dropped. The 25th percentile salary fell slightly from $43,216 in 1990 to $43,000 in 2024.
Unemployment is also high. In March 2025, 5.8% of grads aged 22–27 were unemployed. That’s more than double the rate for all college grads, which stood at 2.7%.
In addition, many are underemployed. Over 41% of recent grads work in jobs that don’t require a degree. Even in STEM fields, once seen as safe bets, unemployment rates remain elevated. For example, physics and computer engineering graduates had unemployment rates above 7% in 2023.
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Why It Matters to CRE
These financial pressures are having broader effects. Most notably, they delay household formation. Many young adults are staying with parents or living with roommates. As a result, demand for new multifamily housing may fall short of projections.
Retail is also feeling the shift. Younger consumers are spending less on discretionary goods. Instead, they are focusing on essentials and value-oriented purchases. This trend hurts shopping centers that rely on lifestyle and luxury spending.
Office demand is under pressure too. Since fewer young workers are entering high-wage office roles, and many prefer hybrid setups, space requirements are changing. This could slow leasing activity and affect long-term office planning.
What’s Next
Looking ahead, the ripple effects could be significant. Developers may need to rethink project timelines and tenant expectations. Investors could shift toward properties that align with evolving demographic trends.
According to the Federal Reserve, these changes might reshape multiple CRE sectors. In particular, housing, office, and retail properties could see lasting impacts. If current trends continue, the financial strain on young adults may redefine real estate strategies for decades to come.
