In a new survey of renters by Entrata, a property-management tech company, investments were the No. 1 milestone that made Gen Zers feel successful (37%), even topping homeownership (25%). They were the only age group more likely to feel successful by investing than purchasing a home. Gen Z renters were also more likely to associate success with financial freedom (70%) than with owning a home (55%), a sentiment shared across age groups in the Entrata poll.
Instead of focusing on homeownership, many are prioritizing financial freedom and debt-free living,” Chase Harrington, president ofEntrata, told MarketWatch. I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. **More on this:**What happens if you never buy a house?
What renters are gaining — and giving up. The median home price is roughlyfive times the median household income, according to Harvard University’s Joint Center for Housing Studies; in the 1990s, it was closer to three times. The median sale price of an existing home was $429,100 in August.
As the monthly cost to rent is now less than the monthly cost to own a home bought at today’s prices and interest rates, some renters are choosing not to buy a home until conditions improve. Instead they plan to invest at a higher rate and build their net worth outside of a primary residence, departing from the established path to wealth in the U.S. It now takes about 15 years for new home buyers earning the median income to save for a down payment and break even financially compared to renting and investing during that period, according to Zillow; in some markets, it takes more than 40 years. **Related:**America’s renter generation is trying to build wealth by investing in stocks instead of owning a house As Americans shift their focus to the stock market, equities have surpassed housing as the most valuable household asset, and the gap between the two is growing, MarketWatch reported.
Stocks now account for more than a 30% share of total U.S. household assets, while real estate is closer to 25%, according to TD Securities. In a recent SoFi survey, “the ability to enjoy life” was the most common way Americans defined financial progress: 59% said it was a meaningful marker of progress, and 40% said investing was. Meanwhile, 27% said it was owning a home.
Gen Zers were more likely than other groups to see investing as financial progress (47%), according to a breakout of the SoFi data provided to MarketWatch. Send it to [email protected] and it could appear in Don’t Short Yourself, MarketWatch’s free weekly newsletter. Sign up here to get it in your inbox every Tuesday.**_
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