The Opportunity Of A Life, For Younger Gen.

The plight of baby boomers and retirees has been well-documented in the year after the financial meltdown. But for people in their 20s and 30s who have a good job and feel it’s secure, this is the best of times. Many were renters and had little or no money in the stock market. They didn’t take a six-figure hit to the value of a home or 401(k) account. Now they’re positioned to invest at prices no one would have believed during the boom years.

Home prices are down 30 percent, on average, and 50 percent or more in some markets. The Standard & Poor’s 500 stock index is 34 percent below its record high in October 2007. Young people are benefiting in other ways, too. The Cash for Clunkers program allowed them to trade in beaten-up used cars and buy new ones at a discount. “They’re never going to see that again,” says John Rogin, who owns a Buick dealership in Livonia, Mich.

The Consumer Price Index has recorded a rare drop over the past 12 months — 1.5 percent. And the decline for many goods and services has been much greater, allowing young people to put even more money into stocks and housing. Besides low prices, many have been spurred by low interest rates and a tax credit of up to $8,000 for first-time homebuyers.

First-timers, many between 25 and 34, accounted for about 45 percent of home sales at the end of July, a figure that has risen steadily over the past two years, says Walter Molony, a spokesman with the National Association of Realtors. Only 39 percent of adults under 35 are homeowners, compared with 80 percent of those over 55, according to the U.S. Census Bureau. So the opportunity for those in their 20s and 30s to take advantage of the real estate crash is greater than for any other age group.

Young people also got a break with the stock market. Even with the surge since it hit a 12-year low on March 9, the S&P 500 index is 30 percent lower than it was at the end of 1999. A recent study by T. Rowe Price, a money management company, highlights the benefits that young people can receive from investing in a down market.

The study compared how returns differ if someone starts investing during a weak decade for stocks that’s followed by a strong one — and vice versa. Somebody who invested $500 a month in a fund replicating the S&P 500 starting in 1970 and continuing through the bull market of the 1980s would have ended 1989 with $589,707 — for an annualized rate of return of 11.5 percent.