A generation of young people locked out of homeownership has found another way to build wealth: putting money into the stock market.
The share of people 25 to 39 years old making annual transfers to investment accounts more than tripled between 2013 and 2023 to 14.4 percent, outpacing increases for those 40 and over, according to data from the JPMorgan Chase Institute. The share of 26-year-olds who transferred funds to investment accounts since turning 22 shot up from 8% in 2015 to 40% as of May 2025. The numbers don’t include people investing in 401(k)s.
“We’ve seen really strong, surprisingly strong growth in retail investing in recent years among people who may otherwise be first-time home buyers,” said George Eckerd, the research director for wealth and markets at the institute.
There is overlap in the numbers between investors and homeowners, but Eckerd was struck by the rise in young and lower-income investors at the same time that home buying activity has fallen. That, he said, has tilted the balance of wealth accumulation toward financial markets for young people.
The stock market’s recent record-breaking performance, he added, plus easier access to trading technology are also likely fueling the upswing among young investors.
After the amount of money Laura Wight thought she needed for a down payment on a condo in Chicago kept increasing, she put roughly $10,000 she had earmarked for a home into index funds instead.
“What you get for your money right now and how much of it is just going to interest feels hard,” said Wight, who is 33 and works in marketing for a frozen-foods company.
Watching her returns swell 66% in the almost six years since she started contributing to her Charles Schwab portfolio has changed her thinking on whether she will give priority to homeownership in the future at all. As did the knowledge that she would be able to quickly liquidate some of that money in an emergency, especially after she had to drop $2,100 on emergency dental surgery and other veterinary care for her senior dog a few months ago. (In the end, she was able to pay for it using the money in her high-yield savings account.)
“I can just keep renting and having more flexibility with my money,” Wight said. She now thinks she could be content never buying a home.
Homeownership has long been many Americans’ primary strategy for generating long-term wealth, both because home values generally increase over time and because paying down a mortgage is a way of forcing people to save. But not everyone is convinced it is the future.
“I feel like my money is safer in the stock market than in a house,” said 23-year-old Helen Bovington, who rents an apartment in Manhattan. Though she knows the market can be volatile, she believes in its long-term growth. The Dow Jones Industrial Average hit 50000 for the first time earlier this month. Bovington is less convinced about the future of real estate.
Growing up in Helena, Mont., with the constant seasonal threat of wildfires destroying her family’s rural lake cabin a few hours away, Bovington says her fears about climate change mean the only real estate she thinks would be a foolproof investment is a plot of land.
She has managed to amass about $30,000 after around six years of investing in a fund that excludes fossil fuel companies.
“There is a certain amount of security I feel that I’ve already taken care of myself in that way,” Bovington says. If she never invested another penny, she added, that $30,000 would turn into over $1 million by the time she is in her 60s, assuming a steady 10% rate of return.
The math on owning versus renting for 30 years and investing the difference works out in Bovington’s favor, a Moody’s Analytics analysis for The Wall Street Journal showed—with some caveats.
Moody’s took two hypothetical people, each earning $150,000 annually, to see whether the homeowner or investor came out ahead after 30 years. To do the calculation, the firm assumed the owner had purchased a $500,000 house, with 20% down and a 6.25% mortgage rate. Additional expenses including insurance, property taxes and upkeep brought his monthly total outlay to $3,546.
The investor, on the other hand, would be spending $2,500 each month in rent on a comparable home, and could expect a 3% rent hike each year. She would be investing the difference between the cost to rent and the cost to own each month, assuming a 10% rate of return.
After 30 years of monthly payments, the renter would be wealthier—by $1,194,126. Her final net worth: $2,815,825. The owner’s: $1,621,699 after paying off his mortgage, assuming he doesn’t sell, accounting for a 4% annual rate of appreciation on his home.
Actual rates of return on both a house and a stock market portfolio are highly variable. But the biggest and most problematic assumption in this analysis is that it assumes a level of discipline for the investor group that many would find difficult to stick with, especially early on, says Cristian deRitis, Moody’s Analytics’ deputy chief economist.
“It’s much easier to pause monthly stock market savings than it is to stop paying a mortgage,” deRitis said.
In Brooklyn, 32-year-old Alex Wedel tries to put at least a few hundred dollars into his Fidelity investment account and his Roth IRA every month. But the amount varies based on what gigs he brings in as a freelance content strategist. So does the timing.
“It’ll pop into my head and I’ll be like, ‘Oh! I should put $500 or $1,000 in if I have it in my account,’ ” Wedel said. He found the confidence to open the account a year and a half ago after hearing about how well the market was performing, and feeling as though he was missing out.
“I wish I had started sooner,” Wedel said. He started with roughly $2,000 spread across a handful of low-cost ETFs, and has scaled up from there.
He always thought his long-term financial security would come from owning a home as his parents did. But the $2,225 he pays in rent for his one-bedroom wouldn’t cover monthly expenses for an apartment in Brooklyn he would actually want to buy.
“It feels really impossible,” he said, adding that investing seems like a more realistic way to increase his wealth.
The share of young people in the housing market has plummeted since the turn of the century. Americans ages 18 to 39 made up 51% of home buyers in 1999, but only 44% in 2025, according to a Redfin analysis of census data.
The rate of ownership in that age range fell the most around 2012 when home prices started going up, “and homeownership started getting less and less affordable each year,” Redfin economist Daryl Fairweather said.
The overall homeownership rate for Gen Zers ages 19 to 28 ticked up 1 percentage point between 2024 and 2025, to 27.1%, according to Redfin, likely because of a boom in condo availability.
Zosia Cooper, 40, has been researching why Gen Z is investing at higher rates than their predecessors for her Ph.D. dissertation at the University of California, San Diego. What Cooper heard from the dozens of members of this generation whom she has spoken to, she said, is that they are uncertain about what their economic futures hold, especially their ability to have a straightforward career. Investing, for them, is a way to regain some certainty—with the magic of compound interest.
Still, many young people, even those with stock portfolios, say they do want to own a home.
“People are doing what they can with the menu they’ve been given,” JPMorgan’s Eckerd says.
Write to Rachel Wolfe at rachel.wolfe@wsj.com
