The Wall Street Journal (WSJ) reported on the 15th that Generation Z (born between 1997 and 2012) in the United States is investing their money in the stock market instead of buying houses due to the burden of rising housing prices.
According to data from the JP Morgan Chase Institute cited by the WSJ, the proportion of young people (aged 25-39) transferring funds to investment accounts has more than tripled from 10 years ago to 14.4% as of 2023. In particular, the proportion of 26-year-olds who transferred funds to investment accounts after turning 22 has significantly increased from 8% in 2015 to 40% as of May 2025. This figure excludes investments in retirement pension (401(k)) accounts.
“We’ve seen surprisingly strong growth in personal investment in recent years among people who would otherwise be first-time homebuyers,” said George Eckerd, head of research at the JPMorgan Chase Institute.
Eckerd explained that this shift has shifted the wealth accumulation balance among younger generations away from real estate and toward financial markets. In the United States, as in Korea, homeownership has long been considered a key strategy for long-term wealth accumulation. However, with housing prices in some areas now unaffordable for average wage earners, a growing number of younger people are embracing the long-term growth potential of the stock market, leading to a shift in wealth accumulation strategies.
Research has also shown that those who invest their income in the stock market, rather than taking out a mortgage to own a home, are more likely to accumulate more wealth over the next 30 years. Moody’s compared two people in the United States, each earning $150,000 annually.
One purchased a $500,000 home, while the other rented a similar home and invested the remaining income in the stock market. They analyzed which buyer would have more wealth after 30 years. The homebuyer paid a lump sum of 20% of the home’s value and repaid the loan at an interest rate of 6.25% annually. Additionally, they spent $3,546 per month on insurance, property taxes, and various maintenance costs. They assumed an average annual home price appreciation rate of 4%. On the other hand, stock market investors were assumed to pay an initial rent of $2,500 per month (with a 3% annual increase) and invest the remaining difference in the stock market, earning an average annual return of 10%.
This reflects the historical performance of the U.S. stock market, which averages around 10% per year (assuming dividends are reinvested). Moody’s analyzed that after 30 years, the stock investor would have approximately $2.82 million in assets, approximately $1.19 million more than the homebuyer. However, the WSJ explained that this analysis requires caution as it is a simple comparison of hypothetical individuals and may differ from reality.
It can be overlooked that housing prices and stock market returns are highly volatile, and while it is realistically difficult to avoid mortgage interest payments, it is relatively easy to stop paying stock investments. Meanwhile, with housing prices rising so steeply that purchasing a home feels unattainable, the proportion of young people owning a home has declined as they have turned to stock investments.
According to an analysis by online real estate platform Redfin, the homeownership rate among 18–39-year-olds in the United States is projected to drop significantly from 51% in 1999 to 44% in 2025.