Gen Z Wealth Accumulation Shifting From Housing Market to Stocks: JPM

Gen Zers love to invest. It might be because many of them are locked out of the housing market, according to a new analysis from JPMorganChase Institute.

The firm found that retail-investing activity has seen a particularly large uptick among younger Americans over the last decade. Last year, 37% of 25-year-olds added funds to a retail investment account, the bank found.

That’s around six times the share recorded in 2015, when 6% of 25-year-olds added funds to an account, the bank said in a report.

This marks a shift in wealth-accumulation habits for the younger generation: rather than start to build a nest egg through homeownership, Gen Z is instead investing in the market.

“Housing market conditions — namely, low affordability — may be shifting the allocation of savings, making financial assets like stocks relatively more attractive or accessible than home equity,” JPMorgan researchers wrote.

They continued: “The housing market has long been a core asset for most households. However, fewer young individuals are becoming first-time homebuyers, while the investing population has moved sharply in the opposite direction.”

Investing participation among 25-year-olds has risen sixfold since 2015

Housing market gridlock

Underpinning this whole dynamic is the fact that it’s a tough time to break into the US housing market. The median sales price of a US home hovered around $410,800 in the first quarter, up 29% from five years ago, according to data from the US Census Bureau.

Home-borrowing costs are also elevated. The average 30-year fixed mortgage rate hovered around 6.56% in the last week, according to Freddie Mac, well-above the pandemic norm of around 3%.

The median age of a first-time homebuyer climbed to 38 last year, a record high, according to the National Association of Realtors.

Meanwhile, 60% of Gen Zers said they were worried they would never be able to afford a home, according to a 2024 survey conducted by Clever Real Estate.

“If appropriately managed, younger people’s earlier adoption of these accounts presents a potentially positive sign for their wealth-building opportunities,” JPMorgan said of the investing trend.