A generation of young people deprived of home ownership has found another way to build wealth: investing money in the stock market.
The share of people aged 25 to 39 making annual transfers to investment accounts has more than tripled to 14.4 percent between 2013 and 2023, according to data from JPMorgan Chase Institute, higher than that of people 40 and older. The share of 26-year-olds transferring money to investment accounts after turning 22 is expected to rise from 8% in 2015 to 40% by May 2025. This number does not include people investing in 401(k)s.
“We’ve seen really strong, surprisingly strong growth in retail investment in recent years among people who might otherwise be first-time home buyers,” said George Eckerd, research director of money and markets at the institute.
There is overlap in numbers between investors and homeowners, but Eckerd was struck by the growth of young and low-income investors at the same time as home buying activity declined. This, he said, has tilted the balance of wealth accumulation towards financial markets for young people.
He said the recent record-breaking performance of the stock market along with easy access to trading technology is also fueling the bullishness among young investors.
Laura White thought the amount of money she would need for a down payment on a condo in Chicago was becoming too much, so she put about $10,000 earmarked for the house into an index fund instead.
“It’s hard to see right now what you get for your money and how much of it is going to interest,” said White, 33, who works in marketing for a frozen-food company.
Having seen her returns increase by 66% in the nearly six years since she began contributing to her Charles Schwab portfolio, it has changed her thinking about whether she will prioritize home ownership in the future. As she knew she would be able to quickly deplete some of that money in an emergency, especially after she had to spend $2,100 on emergency dental surgery and other veterinary care for her senior dog a few months earlier. (In the end, she was able to pay it off using the money in her high-yield savings account.)
“I can just continue to rent and have more flexibility with my money,” White said. Now she thinks she can be content with never buying a house.
Homeownership has long been many Americans’ primary strategy for generating long-term wealth, both because home values generally increase over time and because paying off the mortgage is a way to force people to save. But not everyone is convinced this is the future.
“I feel like my money is safer in the stock market than at home,” said Helen Bovington, 23, who rents an apartment in Manhattan. Although she knows the market can be volatile, she believes in its long-term growth. Earlier this month, the Dow Jones Industrial Average reached 50,000 for the first time. Bovington is less confident about the future of real estate.
Bovington, who grew up in Helena, Mont., after the constant seasonal threat of wildfires destroyed her family’s rural lake cabin a few hours away, says her fears about climate change mean the only real estate she thinks would be a surefire investment is a piece of land.
She has managed to collect about $30,000 after almost six years of investing in a fund that excludes fossil fuel companies.
“I think there’s a certain degree of protection and I already take care of myself that way,” says Bovington. He further said, if he never invested a penny, that $30,000 would grow to more than $1 million by age 60, assuming a steady 10% rate of return.
Moody’s Analytics analysis for The Wall Street Journal showed that the math of owning versus renting and investing the difference for 30 years works in Bovington’s favor — with a few caveats.
Moody’s took two hypothetical people, each earning $150,000 a year, to see whether homeowners or investors came out ahead after 30 years. To calculate, the firm assumed the owner purchased a $500,000 home with 20% down and a 6.25% mortgage rate. Additional expenses including insurance, property taxes and maintenance brought their monthly total outlay to $3,546.
On the other hand, the investor would spend $2,500 per month renting a comparable home, and could expect 3% rent increases each year. She will invest the difference between the rental cost and the cost of ownership every month assuming a rate of return of 10%.
After 30 years of monthly payments, the renter will be $1,194,126 richer. His last net worth: $2,815,825. Owner’s: $1,621,699 after paying off his mortgage, assuming a 4% annual appreciation rate on his home, assuming he doesn’t sell.
The real rates of return on both home and stock market portfolios are highly variable. But the biggest and most problematic assumption in this analysis, says Christian Deritis, deputy chief economist at Moody’s Analytics, is that it assumes a level of discipline for the investor group that will be difficult for many to maintain, especially early on.
“It’s much easier to stop monthly stock market savings than it is to stop paying the mortgage,” Deritis said.
In Brooklyn, Alex Weddell, 32, tries to put at least a few hundred dollars into his Fidelity investment account and his Roth IRA every month. But this amount depends on what work he does as a freelance content strategist. Time is also the same.
“It will come to my mind and I’ll say, ‘Oh! I should put $500 or $1,000 in if I have this in my account,'” Wessel said. A year and a half ago, after hearing how well the market was performing, he gained the confidence to open an account that he felt he was missing out on.
“I wish I had started sooner,” Weddell said. He started with about $2,000 in some low-cost ETFs and grew from there.
They always thought that owning a home like their parents did would provide them with long-term financial security. But the $2,225 he pays for rent for his one-bedroom won’t cover the monthly expenses for the apartment he really wants to buy in Brooklyn.
“It seems really impossible,” he said, adding that investing seemed a more realistic way to grow his wealth.
The share of youth in the housing market has declined since the turn of the century. Americans ages 18 to 39 made up 51% of homebuyers in 1999, but only 44% in 2025, according to a Redfin analysis of Census data.
Ownership rates in that age range fell the most around 2012 when home prices started rising, “and home ownership started becoming less and less affordable every year,” said Redfin economist Daryl Fairweather.
According to Redfin, the overall homeownership rate for Gen Zers aged 19 to 28 increases by 1 percentage point to 27.1% between 2024 and 2025, likely due to a surge in condo availability.
Zosia Cooper, 40, is researching why Gen Z is investing in their PhDs at higher rates than their predecessors. Dissertation at the University of California, San Diego. What Cooper has heard from the dozens of members of this generation he has spoken to, he said, is that they are unsure about what their economic future will be, especially their ability to build straightforward careers. For them, investing is a way to achieve some certainty—with the magic of compound interest.
Still, many young people, even those with stock portfolios, say they want to own their own homes.
“People are doing what they can with the menu they’re given,” says JPMorgan’s Eckerd.
Write to Rachel Wolfe rachel.wolfe@wsj.com