Investing, not homeownership, is the No. 1 milestone that makes Gen Z renters feel successful

By Venessa Wong

Younger renters are the only group more likely to feel successful by investing than buying a house

Young renters are more likely to associate success with financial freedom than with owning a home, a new survey found.

Young Americans are refocusing their financial goals as home prices remain high and mortgage rates have crossed 7%, making homeownership unaffordable for many.

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.

"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. "For the property-management industry, this means our focus should shift toward creating communities that provide stability and well-being, rather than just acting as a stepping stone to a mortgage."

More on this: What happens if you never buy a house? What renters are gaining - and giving up.

"The American dream was once synonymous with owning a home, and now we're living in a period where we're seeing that dream shift in real time," Virginia Love, industry principal at Entrata, said in a statement.

The median home price is roughly five 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.

"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 home for seven to 10 years," Brian Walsh, head of advice and planning at SoFi, told MarketWatch. "Gen Z's focus on investing may therefore reflect a thoughtful rent-versus-buy decision while still building wealth for the future."

Do you have a go-to strategy to save or grow your money? Send it to dontshortyourself@marketwatch.com 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.

-Venessa Wong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-14-26 1355ET