Worse Recession

“Young adults had a worse recession than older adults did,” said Jed Kolko, chief economist at real estate website Trulia.com. “Even though young adults have been going back to work in the past year, they’re still much less likely to be employed than they were before the recession.”

What’s more, heads of households under age 40 aren’t benefiting as much from a boom in equity prices, which have hit record highs this year. About 27 percent of 18 to 29 year olds owned stocks as of April 2013, compared to 61 percent of 50 to 64 year olds, a Gallup poll found.

The outlook isn’t all negative. Households headed by younger people have made progress paying down their overall debt since the crisis, said Emmons, the St. Louis Fed economist. Between 2007 and the third quarter of 2013, the group’s average total debt declined 23.7 percent, Emmons estimates, while that for 40 to 61 year olds dropped 10.2 percent.

“There’s been more deleveraging, more shedding of debt by younger families, which is actually a positive in terms of their net worth,” Emmons said.

Financially Healthy

Joe Carson, director of global economic research at AllianceBernstein LP in New York, said even if younger households haven’t rebuilt their wealth to pre-recession levels, it doesn’t mean they aren’t financially healthy and ready to spend.

“Many people thought that was an artificial peak to begin with given overvalued housing,” Carson said. “To even be coming close to that is, to me, a bullish signal.”

That said, young families burned by loan defaults and foreclosures during the housing crash may lack the access to credit they need to buy houses and purchase other items, so their frugality may not soon end.

Plus, America’s youngest adults have continued to take on a different type of debt: borrowing for education. Among households with installment debt, those younger than 35 held about 66 percent of it in student loans, compared to 36.1 percent for those 45 to 54, based on the Federal Reserve’s 2010 Survey of Consumer Finances. That could stall purchases from autos to homes.