Americans hold more of their wealth in stocks than real estate for the first time since World War 2, reflecting a possible shift in what defines the American Dream, some financial experts say.
U.S. households held nearly half (48.2%) of their financial assets in equities in the three months to June, according to Federal Reserve data. That’s up from the trough of 9.5% in 1982 and a record high. Comparatively, real estate lingered in the 20% range, data showed.
The flip in favor of U.S. equities underscores how stocks have become a dominant driver of household wealth and consumer spending, analysts said.
“Eighty years ago, the American Dream came with a front porch, a two-car garage, and a white picket fence,” wrote The Global Guru editor Nicholas Vardy in his newsletter. “Today, it may come with a brokerage account and a portfolio of great businesses.”
Why Have Stocks Taken on Such a Large Role in America’s Wealth?
Stocks have grown as a source of wealth in part due to the sheer size of the rally over recent years, dwarfing real estate returns, analysts said.
“The big takeaway is that equity markets have generated tremendous wealth, far ahead of appreciation in real estate over the past decade,” said Dean Lyulkin, chief executive of lender Cardiff.
In 2025, 57% of new household wealth globally was based in equity, and only 15% in real estate, according to a McKinsey Global Institute report. “This was a marked departure from the average composition of wealth drivers since 2000, in which real estate produced more than half of wealth growth,” it said. The U.S. “saw an increase, due largely to valuation gains.”
According to UBS’s 2026 Global Real Estate Bubble Index, inflation-adjusted home prices across 23 major cities in the world rose an average of just 0.5% over the past year. “That’s not exactly setting the world on fire,” Vardy said, especially considering the S&P 500 index has logged double-digit returns every year since 2023.
Changes in the economy and attitudes have also fueled the switch, analysts said. The share of first-time home buyers dropped to a record low 21%, while the typical age of first-time buyers climbed to an all-time high of 40 years, the National Association of Realtors said in November.
“That signifies what the market is like for younger generations,” said Tom O’Neill, risk adviser at credit agency Equifax. “They can’t afford a house so younger generations are building wealth in avenues available to them.”
Gen X and Millennials (born between 1965 and 1996) may also value mobility over roots. Between 2020 and 2024, the number of millionaire renter households remained small compared to homeowners, but it was growing at a much faster pace, according to apartment search platform RentCafe, which analyzed American Community Survey estimates. Millionaire renters grew 229%, or more than tripled in just five years. That’s faster than the 193% jump in millionaire homeowners over the same period.
This reflects a change in housing preferences as affluent Americans have long favored owning, which has been a hallmark of the “American Dream,” RentCafe said.
Is a House Still Worth Buying?
A house is still worth buying for millions of Americans, most financial experts said.
“I’m not suggesting you rush out and sell the family home,” Vardy said. “That would be silly. Your house is where you live. Where you raise your kids. Where you build memories. You can’t put a price on all of that.”
But “shelter and investment returns are two different things,” he said. “Don’t confuse them … over the long haul, I want my money working in productive assets. Not simply waiting for the next buyer to pay more than I did.”
Although the S&P 500 index has returned on average 10% annually, Lyulkin notes the small down payment to buy real estate helps boost returns. For a small down payment, people can earn 100% of the profit from any appreciation in a larger asset, he said.
In a simple example, for a $50,000 investment in stocks returning 10%, you gain $5,000. However, a $50,000 down payment on a $500,000 home that appreciates 10% earns you $50,000.
Plus, even as stocks dominate now, no one trend lasts forever.
“How much of this shift is because of the environment we’re in?” O’Neill said. “When the environment shifts, maybe people will like the safety of a house and rates go down. People will go again the route of their parents.”
But financial advisers still warn that it’s best to be diversified. Do not tie up all of your wealth in property, which can be hard to liquidate if you need money, they said.
“Over periods of higher inflation and affordability stress, households that have access to liquid wealth have fared much better over last 1.5 to 2 years than those who did not have access to that,” O’Neill said.
As Lyulkin sees it, “the American Dream has not fundamentally changed. We all want financial stability, a safe and practical home along with a comfortable retirement. But the degree of difficulty to own a home along America’s coasts has changed, particularly for younger households. Younger Americans should be investing in the equity markets earlier than ever. If they have to wait a little longer to own a home, it’s not the end of the world.”
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Reporting by Medora Lee, USA TODAY / USA TODAY
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