Millennials have higher incomes and median wealth than the generation before them, but they have also acquired more mortgage debt, according to new data from Statistics Canada.

As part of a longer series examining debt and wealth of young Canadian households, the statistics agency conducted a study to compare the economic well-being of millennials aged 25 to 34 with Gen-Xers’ when they were that age.

Statistics Canada defines millennials as those born between 1982 and 1991 and young Gen-Xers are those born between 1965 and 1971.

Relying on several financial surveys dating back to 1984, Statistics Canada found that while millennials were wealthier than young Gen-Xers, they were also more indebted as a result of higher levels of mortgage debt.

The results of this study are presented in 2016 current dollars and have been adjusted for inflation by Statistics Canada.

For instance, household incomes for millennials aged 25 to 34 reached $66,500 in 2016. Comparatively, household incomes only reached $51,000 for Gen-Xers when they were the same age in 1999.

The agency attributes millennials’ higher incomes to their pursuit of post-secondary studies, describing them as “the most educated generation.”

As for their median net worth, or total household assets minus total debts, millennials reached $70,600 while the median net worth for Gen-Xers was $42,800.

Source: Statistics Canada

Mortgage debt

Statistics Canada said the millennial generation is relatively more indebted than Gen-Xers before them because they carry “considerably” more mortgage debt.

The study found the after-tax income ratio for millennials reached 216 per cent. That number far exceeded the ratio for young Gen-Xers at 125 per cent or that of young baby boomers (those born between 1950 and 1961) at 80 per cent.

Surprisingly, despite prolonged periods of home price inflation, Statistics Canada determined that millennials have entered the housing market at nearly the same pace as previous generations.

However, even though homeownership rates among millennials were similar to young Gen-Xers and young boomers before them, the amount of mortgage debt they carried was significantly higher.

According to the study, the median mortgage debt for millennials aged 30 to 34 was $218,000, or more than 2.5 times the value of their median after-tax income of $83,000.

By comparison, young baby boomers’ median mortgage debt was only $67,800, or the equivalent of their median after-tax income.

Source: Statistics Canada

Millennial divide

Although millennials as a whole appeared to be better off than the generation before them in terms of income and net worth, there was a significant gap between the wealthiest and poorest members of this demographic, the study said.

For example, Statistics Canada said the net worth for millennials in the bottom 25 per cent was $9,500 while the net worth for top 25 per cent was $253,900. Furthermore, the net worth of the top 10 per cent of millennials ($588,600) made up 55 per cent of the total wealth of their entire generation.

The disparity between the poorest and the wealthiest was less pronounced in previous generations, according to the data. The net worth among Gen-Xers, for instance, ranged from $6,200 to $126,900.

The researchers also recorded a notable difference in wealth between millennials who invested in the housing market and those who didn’t. The data suggests that millennial homeowners reached a median wealth of $261,900 while those who didn’t invest in housing only reached $18,400.

Higher education was also an important factor in determining millennial economic well-being among those who attained a university degree in a stronger financial position than those with a high school diploma or less. The median wealth was $116,000 for millennials with a post-secondary education compared to $34,100 for those without one, the study said.

Lastly, where millennials lived was a strong indicator of their wealth. According to the data, millennials living in Vancouver and Toronto had a higher net worth than their peers in the rest of the country.

In Toronto, the median net worth for millennials reached $145,000. Millennials living in Vancouver had a median net worth of $91,000.

Statistics Canada ascribed these findings to differences in housing values across the country with principal residence assets valued at $650,000 in Vancouver and Toronto, more than double the national level of $320,000.

Source: Statistics Canada