Young Americans Drop Homebuying as Primary Wealth Strategy

Younger Americans are increasingly less likely to treat homeownership as the primary way to build wealth amid tight starter-home supply, high prices and rising borrowing costs. A Pew Research Center survey found nine in 10 adults under 40 say it is harder for young people to buy a home than it was for their parents. Only 25% of adults ages 18 to 39 described buying a home as “very good investment,” while 38% called it “somewhat good” and 21% said it was neither good nor bad. Nearly 40% of adults 60 and older called homebuying a “very good investment.”

Market data show older generations account for a large share of purchases. The National Association of Realtors reports baby boomers made up 42% of homebuyers this year, millennials 26% (down from 29% the previous year) and Gen Z 4%. Jessica Lautz, deputy chief economist at the National Association of Realtors, noted first-time buyers face “affordability and also incredibly tight inventory, especially for starter level homes.” Lautz estimated a typical homeowner this year will have roughly $446,000 in net worth and said delaying a first home can cost about $150,000 in lost wealth gains over a decade.

Prices and mortgage rates have increased. Redfin reported a median U.S. home price near $409,000 in June, and the average 30-year mortgage rate stood above 6.5% in July. Chris Porter, senior vice president at John Burns Research and Consulting, observed that homeowners who secured lower pandemic-era rates are reluctant to move, which reduces the number of homes that would otherwise filter to entry-level buyers. Porter noted some supply that might reach entry-level buyers is being held back because owners do not want to trade up to a higher rate.

Other financial pressures limit first-time buyers. Analysts point to high rents, student loan debt and childcare costs as barriers to saving for down payments. Federal Reserve data show Americans 55 and older hold about 75% of the nation’s wealth. The Fed also reports nearly half of adults ages 18 to 29 live with their parents and 47% in that age group receive financial help from someone outside their household to pay expenses.

Younger adults are shifting toward other savings and investment options. A 2025 Ipsos poll found 18% of 18- to 34-year-olds view homeownership as a good way to build wealth. An Intuit survey indicated 64% of Gen Z respondents prioritize peace of mind over wealth accumulation. Financial planners report many clients in their 20s and 30s prioritize retirement accounts such as 401(k)s and IRAs over real estate. Dinon Hughes, a Gen Z financial planner in New Hampshire, bought a duplex, lived in one unit and rented the other to friends to reduce costs and generate rental income. Hughes described homebuying for many younger people as more of a life decision than a straightforward investment.

Experts warn the combination of limited starter-home construction, high prices and elevated borrowing costs is leaving fewer young adults able to capture the traditional wealth gains associated with early homeownership.