A recent analyst note from Morgan Stanley underscores the significant role that stay-at-home 20-somethings play in fueling the luxury boom in the Western world. According to the investment bank, this trend is actually favorable for the luxury sector as it enables young adults who reside with their parents to have more disposable income to spend on high-end items. Additionally, it helps alleviate concerns about the increasing cost of living.

In Britain, statistics reveal that approximately 42% of adults under the age of 34 still live with their parents, with a larger percentage being men than women. This figure is the highest on record since 1996, when data collection began, surpassing the previous high of 36% in that year. By remaining in their parents’ homes, these young adults benefit from reduced rental and grocery expenses, thus freeing up more money to indulge in luxury goods.

Morgan Stanley’s analysis indicates that the luxury consumer demographic in the Western world is getting younger in recent years. Edouard Aubin, an analyst at the investment bank, suggests that the younger generation is less affected by factors like skyrocketing energy prices and inflation. The same trend is observed in the United States, where half of the 18-29 age group now reside with their parents – the highest rate since the 1940s. This pattern is expected to persist due to high housing costs, longer periods of education, and a delayed average age of marriage.

While some of these young adults may be saving up to buy their own homes in the future, many are adopting a “live-now” mindset and choosing to spend their money on luxury products tailored to the youth market. The luxury sector has responded to this demand by introducing a growing range of products specifically designed to appeal to these younger consumers.

Overall, the presence of stay-at-home 20-somethings has a significant impact on the luxury industry, driving sales and contributing to growth in the Western world. Morgan Stanley’s analysis emphasizes the importance of this demographic and suggests that luxury brands should continue to cater to the preferences and desires of these young consumers to capture their attention and purchasing power.

Useful links:
Why Millennials are Holding off on Buying Homes (And What They’re Doing Instead)
Why Luxury Brands Need to Understand Generation Z