For much of the postwar era, Americans bought a starter home and watched it become an investment. Decades later, fulfilling the typical American Dream of a home with white picket fence dotting the front lawn has become all but unattainable, as home prices have soared 235% since January 2000. As a result, many young people are going all in on the stock market, viewing their brokerage accounts as the new American Dream.

“For younger adults who despair about ever being able to buy a home, investing in financial markets can be a great way to save until they can afford one,” Chen Zhao, the head of economics research at Redfin, told Fortune. 

Zhao’s not wrong: less than half of Gen Z and Millennials can afford to buy a home, and the age of the average first-time homebuyer has jumped from 28 in 1992 to 40 in 2025. Despite this, it’s still seen as a good investment: more than two-thirds of Americans say buying a home is still an important asset that holds value. But as homeownership becomes a fleeting concept for younger generations as home costs continue skyrocketing roughly 50% in recent years, young adults are treating their down payments as the new starter asset as they amass a record high $3.1 trillion in holdings, up 4.5 times since the pandemic alone.

That anxiety is already changing behavior. Nearly a third of Gen Z adults (31%) say they’ve postponed buying a home because of financial pressure, and 34% worry they may never be able to afford one at all, according to Northwestern Mutual’s 2026 Planning & Progress Study.

The sheer scale of investing is driving this shift, says George Eckerd, research director for wealth and markets at the JPMorganChase Institute. The rates of owning stocks have “gone up so much” that, when paired with even flat or softening homeownership, “that is a significant change in the way young Americans are building wealth,” Eckerd told Fortune.

Rather than parking every housing dollar into a savings account, younger Americans are increasingly regarding stock investments as convertible into down payments if and when homeownership becomes feasible. Among Gen Z and Millennials who had recently bought a home, one in five sold stocks to pay for the down payment compared to twice the percentage of Boomers, according to a 2025 Redfin survey. More than half of Millennials also say they’re forced to choose between investing for their retirement and homeownership.

Eckerd told Fortune stocks and homes remain fundamentally different tools. Stocks are liquid and easy to diversify, while a house is usually leveraged and concentrated in a single property, even though it does come with tax advantages.

“The housing cycle can be somewhat different than the stock market cycle, but they do tend to at least be affected by some similar factors, like recessions and interest rates,” Eckerd said.

Young Americans hold record stock wealth as the median age of a homeowner hits middle age

The Federal Reserve has tracked how much of the stock market belongs to Americans under 40 since 1989. Their combined holdings are now bigger than ever as it reached $3.09 trillion this year.

This is because stocks and mutual funds are now a bigger slice of young households’ balance sheets. Equities made up just 9% of under-40 households’ net worth in 1989, but today it’s 27%, the highest share on record. Those young investors are also starting to put money into stocks at earlier ages. According to a Charles Schwab survey, Gen Z is starting at 19 and Millennials at 25. Today, Gen Z makes up a third of new Schwab clients, a company spokesperson told Fortune.

They’re moving up other financial milestones, too. Gen Z began saving for retirement at 22 on average and Millennials at 28, according to the 2026 Northwestern Mutual study — years earlier than their Boomer parents and grandparents.

This is all happening as some metrics put the median age of a homeowner in 2025 to 59, up two decades from 39 in 2005. While 90% of Gen Z surveyed in a recent report said they want to own a home one day, 79% also said they are being priced out of the market.

That relationship between more young retail investors and housing affordability is evident in recent a JPMorganChase Institute report co-authored by Eckerd, which found that 37% of 25-year-olds had a retail investment account in 2024, sixfold more than in 2015, just as retail investing flows rose roughly 50% from 2023 to early 2025.

It also ties the trend of more young retail investors to housing. The report said declining affordability “may be shifting the allocation of savings, making financial assets like stocks relatively more attractive or accessible than home equity,” according to the report.

The bigger difference may be psychological. A mortgage locks people into a stable monthly saving mechanism in a way that a brokerage account, funded by discretionary transfers, often doesn’t—unless it’s a 401(k), where automatic payroll contributions tend to produce the same discipline.

“Some people want to be locked into a monthly saving mechanism by paying their mortgage every month and accumulating that equity,” Eckerd told Fortune. A brokerage, however, doesn’t have that same kind of requirement.“Whereas they might not have the discipline to actually make a discretionary decision to send another dollop of money to their brokerage account every month.”

Risks facing younger investors

Even if younger adults treat their brokerages as if they were paying into a mortgage, Douglas Boneparth, a certified financial planner and president of New York wealth-management firm Bone Fide Wealth, told Fortune that some younger investors may gravitate toward meme stocks, crypto and leverage instead of diversified investing. 

“People go to riskier assets because they feel there may not be any other way to generate wealth,” Boneparth said.

Social media amplifies that pull, Boneparth said, describing a “very noisy world” where algorithm-fed glimpses of instant riches make disciplined investing look less appealing— pressure that can push the priced-out toward going “triple levered on semiconductors” instead of steady monthly investing, the double-edged nature of investing by smartphone.

“You can download an app on your phone and instantly start trading,” Boneparth said. “I don’t like the fact that it doesn’t teach you anything about being a disciplined and consistent investor, and you can lever yourself up and put yourself into some pretty precarious financial situations if you’re not careful.”

The numbers back him up. Schwab’s August client sentiment survey found 48% of its Gen Z clients are now bullish on the U.S. stock market, up from just 24% the quarter before, and 41% of the firm’s active traders describe themselves as at least somewhat risk-seeking, with 84% saying they’d buy into a market dip rather than pull back.

While access to markets is easier than ever because of apps like Robinhood, it can’t truly be seen as democratizing wealth-building. Eckerd’s research found that lower-income investors have been “accumulating later” in the market’s upswing—buying in only after valuations had already climbed higher. Eckerd traces the pattern to the job market: disadvantaged groups tend to face more cyclical unemployment, so their income gains often arrive late in a given economic cycle. Separate academic research of his own found the same dynamic in housing—lower-income areas and Black communities have shown more cyclical participation in homebuying since the 1990s. In both markets, he said, disadvantaged groups “only can afford to accumulate assets when they’ve already appreciated.”

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