Under-40s don’t see homeownership as the wealth-building tool it once was, with surging property prices and ownership costs outstripping wage rises.
The fast-rising costs of owning a home have some young Americans questioning whether buying a house is still a good investment. Take Tony Zhang, 34, who bought a $950,000 townhouse in Irvine, California in 2021 and says he now regrets it.
The supply-chain manager says investing his down payment of roughly 30% in the stock market instead would have left him with a portfolio worth as much as $1 million today.
“Had I just taken my down payment and bought Meta, Nvidia or any growth stock, I probably wouldn’t even be working my 9-to-5,” he said. Even with a more conservative investment that mirrored the S&P 500, he estimates he’d have an extra couple of hundred thousand dollars. In the meantime, renting a comparable two-bedroom apartment in his area would be about $800 cheaper than his $4,300 monthly housing costs, which don’t include maintenance.
Zhang is among many people under 40 who feel that homeownership isn’t the wealth-building tool it used to be. Less than a quarter of Americans aged 18 to 39 say buying a home is a very good investment, compared with 38% of those over 60 years old, a recent survey by the Pew Research Center found. A further 38% of under-40s see property as a “somewhat good” place to park their money.
A separate survey by the Federal Reserve Bank of New York found the proportion of under-50s who consider housing to be a “very good” investment had fallen to about 16% in February, from about 25% five years earlier. Broadly speaking, homes are a worse investment for first-time buyers today because wages haven’t kept up with surging prices and ownership costs, said Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School.
The median sale price of a US home jumped 53% to $379,000 in the six years to May 2026, Zillow data show, while borrowing costs more than doubled. Those who can afford to buy face outlays including property taxes, insurance and maintenance bills, which cost the average US homeowner $15,979 in 2025 — a 4.7% increase from the previous year, while household incomes rose just 3.8% over the period.
More than half of US homes also lost value last year — the highest share since 2012, according to Zillow, when the effects of the global financial crisis were still playing out.
“Younger Americans’ more negative view on homeownership reflects the economics of their lived experience, ” said Wachter. “They face an affordability problem and they don’t get the returns. ” Almost nine in 10 Americans agree that buying a home is harder for young adults today than it was for their parents’ generation, the Pew research found. That said, only 16% of survey respondents aged under 40 went as far as saying a house is a bad investment.
Owning a home can provide families with stability and, for those who can afford to hang onto it, a source of intergenerational wealth. Returns vary widely based where a homeowner buys their property and how long they own it, noted Pew senior researcher Richard Fry.
“It’s a complicated calculation and probably one of the most expensive things young adults will ever buy,” he said. “It’s not a one-size-fits-all answer. ”Atalyia Ferrara, a 28-year-old teacher, bought a $230,000 four-bedroom Philadelphia townhouse in July 2021 with a $1,485 down payment, thanks to the city’s Keystone Home Loan Program.
Her monthly mortgage and taxes have gone up just $335 a month since then, but the maintenance costs have forced her to dip into her savings instead of building a nest egg. She’s already poured more than $28,000 into home improvements, with another $25,000 for electrical repairs looming. Ferrara now works in neighboring New Jersey and says the house has become a money pit in an inconvenient location.
She and her husband are considering selling so they can rent in an area with better access to work and childcare.
“I bought the house at 23, just trying to get my foot in the door of building equity,” said Ferrara. “Instead, I’m stuck with a house that’s kept me where I’m at and paying thousands for repairs. ” Zhang, in California, is planning to stay put until his eight-year-old daughter goes to college, hoping to cash in on his home’s appreciation down the line. After that, he plans to sell up and “rent for sure.
” Still, he can’t help but think of what he could have made in the short term on a different investment.
“Just looking at how the stock market has performed, the opportunity cost of putting that money into a home has absolutely screwed me over,” Zhang said.
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