Business 6 min read By Alice Ashford
Older millennials outspend all generations on hobbies as housing divide widens
Bank of America Institute data shows older millennials lead per-customer hobby spending, outpacing Gen X, baby boomers and Gen Z, mirroring a growing split in the housing market between owners and renters.
Older millennials are pulling ahead of every other generation in the hobby economy, according to new analysis from the Bank of America Institute, in a trend that mirrors their growing dominance of the housing market. The group, defined by the bank as those born between 1978 and 1988, spends more per customer on hobbies than Gen X, baby boomers, younger millennials and Gen Z.
Their hobby outlays were a little more than twice those of Gen Z in the three months through August, based on an index that sets Gen Z spending at 100. Joe Wadford, an economist at the BofA Institute, said older millennials lead on multiple measures. Not only do they spend the most per buyer, but a higher share of them have hobby-related spending than any other generation. Millennials have seen accelerating hobby spending over the past two years, he added, while most other generations have recorded cooling in both spending and transactions.
The findings echo an emerging divide in housing. Older millennials have become the highest-earning homebuyers, are more likely than younger millennials to be repeat buyers, and are moving into larger homes as their families and incomes grow. Many have accumulated housing wealth and, if they locked in lower mortgage rates, enjoy more stable monthly housing costs than renters now facing high rents and down-payment hurdles.
Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, said a «definite split» is happening within the millennial generation, driven by those who locked in low mortgage rates and those who did not. Asked whether the issue is structural, she said: «I think we’re at that point right now … It becomes a renter versus an owner economic scenario.»
Bank of America defines hobbies as spending at arts-and-crafts stores, hobby shops, outdoor-recreation retailers and service providers, ski resorts, scuba retailers and rentals, adventure-activity providers, educational-toy sellers, outdoor retailers and some toy stores. It excludes travel, golf and video games, which it assesses separately. Older millennials led spending in the category, followed closely by baby boomers and Gen X.
The result is notable because the group has relatively little free time. Adults aged 35 to 44 average about four hours and 15 minutes of leisure a day, the lowest figure across Census Bureau age groups cited in the report. Yet their spending suggests leisure is increasingly part of a household budget rather than simply an individual pursuit, and may include spending on children’s activities as well as their own interests.
Wadford said it is unclear whether millennial homeowners spend disproportionately more than renters on hobbies, and he believes the pattern is more an age and life-stage effect than a sign of a wealth divide. «Older Millennials seem to have more in common with younger Gen Xers than they do with Gen Z or even younger Millennials,» he said. «That’s why older Millennials’ hobby spending aligns more with Gen X and Baby Boomers, rather than younger members of the same generation.»
Lautz said older millennials are entering their peak earning years and some are putting those earnings toward homeownership. «As their incomes have grown, many are also at a stage of life when they may be looking for more space, whether for a growing family or simply to accommodate their lifestyle and interests.» She added that the need for more space does not necessarily reflect family size alone, and could mean a craft room, home office or gaming room. Later childbearing and lower birth rates than in previous generations may also leave some millennial households with more discretionary money for their own interests.
The BofA figures do not show whether a customer owns a home, rents, has children, or uses home equity to finance hobbies, so they cannot prove that homeownership is the reason older millennials lead hobby spending. But Lautz said millennial homeowners may have a financial advantage that affects the capacity for discretionary purchases. «Millennial homeowners have had the opportunity to build housing wealth, and those who locked in lower mortgage rates may have more stability in their monthly housing costs,» she said. «That can provide greater flexibility for discretionary spending, whether on travel, hobbies, or other interests.»
Broader data supports the idea that housing status increasingly separates consumers’ financial options. Renters devoted 39% of their total expenditures to rent in 2023, compared with 31% of total spending on housing among homeowners, according to a Freddie Mac analysis of Bureau of Labor Statistics data.
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