Can Millennials and Gen Z Build Wealth If They Don’t Own Homes? What Experts Say

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According to a study from Realtor.com, 75% of Americans believe that homeownership is part of the American dream. The survey also found that 59% of Americans felt that purchasing a home was a realistic goal and not some fantasy.

An interesting statistic from this survey was that millennials and Gen Z shared that they believe homeownership is required to build long-term wealth, with over half of the respondents in these age groups sharing this opinion. On the other hand, only 48% of Gen X and 45% of boomers thought they needed to own a home to build wealth. 

Here are some expert opinions on whether or not homeownership is required to build wealth. Can millennials and Gen Z build wealth if they don’t own homes? 

There Are Numerous Ways To Build Wealth

“Building wealth can be about consistently prioritizing your long-term financial goals, and homeownership isn’t the only path,” said Jared Hubbard, fintech product manager at Plynk. “Clearly set[ting] goals, steady habits and the discipline to invest in your future may help you grow wealth over time, no matter where you start.”

While owning real estate can help you build wealth, it’s not the only option. Young people can boost their savings through investing, for example. “You might try thinking of investing like a monthly expense and set aside what you can, even if it’s just a few dollars,” Hubbard said.

Saving up for a down payment isn’t always feasible, but you can start setting aside money for your future at any level through investing platforms. 

If you’re uncertain about investing, you can automate your accounts by setting up recurring contributions from your paychecks to ensure you consistently put money toward your future. The best part about consistently investing is that your savings can build up over time and you may eventually have enough saved up for a down payment if you choose to go in that direction.

Mastering Financial Basics Can Be More Important Than Buying Property

“Understanding where your money is going helps you to make intentional choices, whether that means cutting back on impulse purchases or finding small ways to save,” Hubbard said. “Every dollar you don’t spend on takeout or an unnecessary purchase is a dollar you could use to invest.”

While saving up for a home can help a young person build wealth, it may be more beneficial to focus on mastering the basics of personal finance to have the funds to invest. It’s important for young people to know that they don’t have to wait until they become homeowners to start building wealth.

If they want to take their finances seriously, they can begin with any of the following actions.

• Start aggressively paying down debt.
• Build up an emergency fund with three to six months’ worth of living expenses.
• Cut out unnecessary expenses.
• Max out retirement contributions.
• Start investing consistently. 

As one gets better with the basics of money management, they may save up enough for a down payment or realize that owning property isn’t essential for their long-term goals. 

Homeownership May Not Be the Best Option in 2025

Chelsea Williams, a certified financial literacy expert and founder of Money Mastery, noted that in the past, homeownership was traditionally seen as the best path to wealth building, but it may not be the right move for younger generations right now.

Since owning a home comes with so many expenses on top of a mortgage payment, it can be a financially stressful commitment for young people who are already struggling with the higher costs of daily expenses.

“Renting can actually be a smarter financial decision when you consider the hidden costs of homeownership, such as repairs, maintenance and property taxes,” she said. Williams also pointed out that renting can be a great option for younger people who want to travel, explore career opportunities or live in a high-cost area without stressing about mortgage rates and hidden costs. 

Williams suggested that people open a high-yield savings account instead of tying up all their money in a house. This way, they can take advantage of compounding interest while keeping their cash accessible.

Investments Other Than Real Estate Can Build Wealth 

“While homeownership can be a strong asset in the form of property appreciation and equity built through mortgage payments, it’s not required for accumulating wealth,” said Peter Reagan, a financial market strategist at Birch Gold Group. “Diversifying investments, such as in stocks, bonds and other financial instruments, can provide stronger alternatives and greater flexibility.”

Reagan stressed that even though real estate can appreciate in value over the long run, it’s still an illiquid asset that can tie up a portion of your net worth. When you allocate all of your savings to purchasing a property, you’re not able to diversify your investment portfolio. You can either go all-in on a property as a wealth-building tool or spread your investments through different assets.

You don’t have to purchase a home to feel like you’re building for the future. 

Real Estate Can Be a Reliable Wealth-Building Tool 

Dave Flanders, the owner and founder of HomeVisors Collective, pointed out that owning a home isn’t the only way to build wealth, but it’s one of the most reliable ways to create financial stability. “Homeowners build equity, see their property value grow and get tax benefits that renters don’t,” he said.

While homeownership isn’t required to build wealth, it can be a simple way to prioritize finances for those who are struggling with investing.

Since there’s no such thing as a one-size-fits-all solution when it comes to the idea of homeownership, it’s crucial that one considers all of the perspectives before making a decision. The experts agree that the best way to build wealth depends on personal goals and risk tolerance.

While purchasing a home can be a wise financial decision if you’re prepared for it, you could also spend a lot of money on maintaining your property that would be diverted from other investments.

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