Young Americans Investing in Stocks Rather Than Homes
New York, NY, October 13, 2025-"A record stock market might have a link to the unaffordable housing market,” based on how younger Americans are thinking about their finances," reports the Wall Street Journal.
“Owning a home has traditionally been the way for U.S. households to build wealth. But today’s high property prices mean younger people either can’t afford to get on the property ladder or think they can earn a better return elsewhere.
“Influencers on social media are weighing in. Their message: Don’t stretch to buy a house at today’s prices. Rent and invest your cash instead.
“The debate over renting vs. buying is longstanding and hotly contested. An extended stretch of buoyant stock markets adds an extra dimension to it.
“Many younger investors only know a time when stocks have returned on average about 14% a year, well above historical norms. And the stock market today is anything but a bargain: The S&P 500 is almost as expensive today, based on its price/earnings ratio, as it was on the eve of the dot-com bust.
“Yet a wider gap between the cost of owning and renting has bolstered the argument for renting and investing. And it is doing so as young people are drawn to investing thanks to meme-stock social-media chatter, the crypto boom and zero-commission trading apps such as Robinhood Markets.
“A JPMorgan Chase report found that 37% of 25-year-olds used investment accounts in 2024, up from 6% of the age group in 2015. A sixfold increase in the number of young people investing in the stock market over the past decade suggests a shift in the way they think about building wealth.
“The report said, “Housing market conditions…may be shifting the allocation of savings, making financial assets like stocks relatively more attractive or accessible than home equity.”
“The homeownership rate for Gen Z-people born between 1997 and 2012-is just 16%, data from the National Association of Realtors shows. Meanwhile, the share of first-time home buyers is at an all-time low. Combined, this is a headache for home builders and those who would like to sell their homes.
“The monthly mortgage payment on an average $400,000 home is around $2,170, based on current rates and assuming the buyer has a $60,000, or a 15%, down payment. This is around 36% of the after-tax pay of a person on a median household income.
“But the all-in costs of homeownership are higher because insurance, property-tax and maintenance expenses have shot up in recent years. Add those in, and total housing expenses in some cases can consume nearly half of median household income.
“The difference between the all-in cost of a home at the median price of renting a two-bed apartment can range from, say, $8,000 to $14,000 a year depending on location and other factors such as property-tax levels.”