Gen Z renters ditch the homeownership dream for the stock market as high costs languish

For young renters, the American Dream may come with a stock portfolio instead of a picket fence.Gen Z renters are more likely to identify investing as a milestone that makes them feel successful than buying a home, according to a new Entrata survey reported by MarketWatch.Some 37% chose investing, compared with 25% who selected homeownership — making Gen Z the only generation surveyed to put investing ahead of purchasing a property on that measure.The findings suggest a shift in how young Americans define financial achievement as the traditional path to homeownership grows harder to navigate.“The data shows a clear shift in what success looks like for today’s renters.Instead of focusing on homeownership, many are prioritizing financial freedom and debt-free living,” Chase Harrington, president of Entrata, told MarketWatch.In a separate measure, 70% of Gen Z renters associated success with financial freedom, compared with 55% who associated it with owning a home.

Renters across age groups shared that preference.The financial hurdles to buying help explain the appeal of building wealth elsewhere.US housing costs could take until 2031 to return to their 2018 levels relative to household income — even if mortgage rates fall to 6% and annual home-price growth holds around 2.1%, according to a Redfin analysis.Buyers in New York City and Long Island could face a wait of more than a decade.And a down payment is only the beginning.

Mortgage interest, property taxes, insurance and maintenance all factor into the cost of ownership.That leaves renters weighing whether buying is the best use of their money, particularly if a job change or growing family could prompt another move before the upfront costs pay off.“Homeownership can be an important part of long-term financial security, but today’s home prices and mortgage rates mean that renting while investing may make more financial sense for many young people — especially if they do not expect to stay in one ho...