"You Can't Afford a Home Anyway... Renting and Investing Turned into 4 Billion Won": How Young Americans Are Changing Their Asset Strategy

Homeownership rates fall as stock investing surges
30-year projections suggest stock market may outperform real estate

An analysis has found that Generation Z in the United States is shifting the stage of its asset building from real estate to the stock market to avoid soaring home prices.

A trader working inside the New York Stock Exchange (NYSE) in the United States. Photo by Reuters, Yonhap News

On the 15th (local time), the Wall Street Journal (WSJ) reported that as the burden of purchasing a home has recently increased, Generation Z, defined as those born between 1997 and 2012, is actively turning to stock investing instead of buying a home.

According to data from the JPMorgan Chase Institute cited by the WSJ, as of 2023, 14.4% of people aged 25 to 39 moved money into investment accounts. This is more than three times higher than 10 years ago. In particular, among 26-year-olds, the share of people who had transferred money into investment accounts since age 22 was only 8% in 2015, but it had surged to 40% by May 2025. Retirement accounts were excluded from these figures.

Research director George Eckerd said, "In recent years, we have seen a particularly notable increase in individual investing among groups that could have been first-time homebuyers," diagnosing that the center of gravity in wealth accumulation is shifting from real estate to financial markets.

In the United States, homeownership has long been regarded as a representative means of building wealth. However, as home prices in some regions have risen to levels that are difficult to reach on middle-class incomes, more young people are turning their hopes to the stock market, which has delivered long-term growth.

Analysts have also suggested that, over the long term, renting instead of buying and then investing the difference can lead to greater asset accumulation. Credit rating agency Moody's compared two hypothetical individuals, each earning an annual income of 150,000 dollars. One buys a 500,000-dollar home, while the other rents a similar home and invests the remaining funds in the stock market.

For the homebuyer, Moody's assumed a 20% down payment on the purchase price, repayment of a mortgage at an annual interest rate of 6.25%, and a total monthly outlay of 3,546 dollars including insurance premiums, property taxes, and maintenance costs. Home prices were assumed to rise at an average annual rate of 4%.

By contrast, for the renter-investor, Moody's assumed a monthly rent of 2,500 dollars (increasing 3% annually), with the remaining amount invested at an average annual return of 10%. This reflects the long-term average return of the U.S. stock market. As a result, after 30 years, the renter-investor's assets were estimated at about 2.82 million dollars, approximately 1.19 million dollars more than the homebuyer.

However, the WSJ stressed that this analysis is a simple comparison based on assumptions. It also noted that home prices and stock returns are highly volatile, and that while it is difficult to suspend mortgage repayments, contributions to investment accounts can be adjusted relatively flexibly.

Existing-home sales plunge...but prices barely budge

This trend has in fact led to a decline in homeownership rates. According to online real estate platform Redfin, the homeownership rate among those aged 18 to 39 fell from 51% in 1999 to 44% in 2025.

Housing market activity indicators also show a slowdown. Redfin's data show that in January this year, the number of signed purchase contracts fell in 45 out of the 50 largest U.S. metropolitan areas. Oakland, California, posted the steepest drop, with transactions plunging 21.6% year-on-year. The average time to close a sale was 66 days, up by one week from a year earlier, and inventory stood at 5.5 months' supply, the highest level in seven years.

While transactions have contracted, prices have been slow to correct. In January, the U.S. median home price was 396,800 dollars, up 0.9% from a year earlier, marking the 31st consecutive month of gains.