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If you own a house, Generation Y's financial problems are now your problems.

The latest indication of what today's young adults are up against comes in a report issued by the Council of Ontario Universities on how its graduates have fared in the work force. It's a document full of numbers showing a strong link between a university education and a career in your chosen field. But down at the very bottom of the report is a fairly shocking account of how incomes for graduates have stagnated in recent years.

Average annual salaries for grads who had been out of school for six months went from $41,699 in 2006 to just $42,636 in 2011. Two years after graduation, the average declined from $49,468 in 2006 to $49,398 in 2011. This drop looks even worse when you consider that inflation averaged 1.8 per cent annually through the same period.

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Persistent weakness in the job market suggests that a reversal of the flat income trend for new grads hasn't reversed. So let's get to work in figuring out what the financial impact will be on the rest of us.

First stop, the housing market. A report issued Monday by CIBC Economics talks about how the 5-per-cent average house price gain in the past year covers up a number of problems. One of them is that strong cities such as Toronto, Calgary and Vancouver are offsetting weakness in places like Victoria and Quebec City. Another is that while more expensive homes have done well, sales of low- to mid-range homes have actually been falling since 2010.

CIBC says the home ownership rate among Canadians age 25 to 35 has, in the past couple of years, fallen from 55 per cent to 50 per cent. High home prices and tighter mortgage insurance regulations have priced a notable chunk of first-time buyers out of the market, the bank says.

With the data on grad salaries, we have even more context for the weakness in the market for first-time home buying. It's not just high prices keeping Gen Y out of the housing market. It's also incomes that have, on average, been falling on an after-inflation basis.

Cecilia Brain, the COU's senior policy analyst, said one theory for explaining the stagnation in incomes for grads is that a tough job market has taken away their leverage in setting salaries. "They're less willing to negotiate, or their employer is more willing to low-ball them," she said.

Alex Usher, president of the consulting firm Higher Education Strategy Associates, said the average income numbers are much scarier when you look at them by field of study. "There's a huge gap," he said. "Computer science has almost kept up with inflation [while] sciences and humanities are way down on an after-inflation basis."

In a blog post, Mr. Usher described the salary numbers as "unequivocally bad news." The most positive thing he could say was that there's data from Statistics Canada suggesting that it now takes three years to achieve the salary increases that used to come in two years. "That's not a disaster by any means, but it does show that – in Ontario at least – recent graduates are having a tougher time…"

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The weakness in the first-time buyer side of the real estate market is just one implication of Gen Y's troubles getting traction in today's economy. People in the car industry, in retailing and in banking and investing should also be asking themselves about the ability of young adults to buy their products both now and in the years ahead.

It's housing where Gen Y's problems will be felt by the most people, however. The CIBC report says there's a well-known pattern of couples moving into a home, starting a family and then moving up to a bigger home. "However, there are many indications that this cycle that dominated the Canadian housing market for decades, is breaking."

For one thing, the prices of move-up homes are increasing out of reach in cities such as Toronto, Ottawa, Calgary and Edmonton. There's also the question of whether it's feasible for young adults to buy homes at all. CIBC says the overall home ownership rate in Canada, now close to 70 per cent, is probably at its peak for the current cycle.

A question for all the baby boomers out there: What's your exit strategy regarding the family home? If you don't have one, use The Globe and Mail's Downsize Your Home Worksheet. As a homeowner, Gen Y's financial problems are now your problems.

Globe app users click here for a table showing salary figures for university grads.

The salary news for grads is bad

Data presented in the 2013 Grad Study from the Council of Ontario Universities show average salaries for students six months after graduation have risen only slightly in recent years, while salaries two years out are actually down.

YearAvg annual salary:
6 mos. after
Avg annual salary:
2 yrs. after

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