Gen Z, Millennials Prioritize Retirement Savings as Homeownership Slips Further Out of Reach

Historically, buying a home has been one of the first investment steps a young adult makes. However, Generation Z and Millennial investors are increasingly using brokerage accounts, 401(k)s and other investment vehicles instead due to high housing costs and affordability concerns.

“The way Gen Z and Millennials are going about … [building] wealth has changed over time,” Scott Ford, president of wealth management at U.S. Bank, told reporters at a bank event in New York on Thursday. “They’re having to find different pathways to accomplish the same financial markers of success.”

According to U.S. Bank’s 2026 Wealth Survey, Gen Z respondents (born between 1997 and 2012) begin building wealth at age 19, on average, compared with age 25 for Millennials (born between 1981 and 1996), age 29 for Gen X (born between 1965 and 1980), and age 32 for Baby Boomers (born before 1965). Despite starting earlier, 56% of Gen Z respondents said they had done everything “right,” but are not where they hoped to be financially, and 62% said they struggle to make any financial progress.

Reordering Goals

Despite affordability challenges, younger investors have not abandoned traditional wealth-building goals such as homeownership and retirement readiness. While owning a home remained a key aspiration for many respondents, they reported delaying purchases to prioritize making retirement and investment contributions.

Among first-generation wealth builders, 63% said they would choose saving for retirement over buying a home. The preference was even more pronounced among inheritance-linked wealth builders, with 74% prioritizing retirement savings over homeownership. Family-guided self-builders also favored retirement saving by a 69%-to-31% margin.

The study defined “family-guided self-builders” as investors building wealth on their own without a meaningful inheritance, while benefiting from strong family financial role models, financial guidance and a family support system. The study defined “inheritance-linked builders” as respondents building wealth with inherited wealth or with the expectation of an inheritance.

“The goals do remain the same, but they’ve been reordered,” Ryan Nelson, U.S. Bank’s president of Wealth Connect, told reporters during the same event. “Homeownership has been pushed down just a little bit more, and what the findings show us is that two-thirds of Millennials and Gen Z are starting their wealth-building journey with an investment account.”

Nelson said younger investors should avoid concentrating all of their retirement savings in a single account and consider additional vehicles alongside employer-sponsored retirement plans.

“When we talk to people that are just starting out, we do try to remind them that a 401(k) is a great avenue, especially if you can match … but don’t forget about the Roth IRA,” he told reporters. “For someone like that, that has so many years to go, especially if they can fit into their budget to make an extra monthly contribution … that’s going to get them even farther than just a 401(k).”

Unprecedented Lack of Affordability

According to the report, the median U.S. home price is approximately $430,000. Speakers at the event said buyers may need annual incomes of $130,000 to $150,000 to afford a median-priced home. Additionally, the average age of a first-time homebuyer has risen to nearly 40 today from about 24 in the 1950s and 1960s.

The U.S. Bank panel repeatedly returned to homeownership as the “American dream,” but acknowledged that many younger Americans view it as increasingly out of reach. The survey found 29% of Gen Z and 26% of Millennials have given up on owning a home for financial reasons.

As affordability pressures mount, families are increasingly stepping in to help. About one-quarter of respondents said homeownership may never be attainable, while 68% of parents in the survey reported providing or planning to provide financial support to their children for major milestones such as buying a home, starting a family or launching a business. More than 70% of parents said they feel a greater responsibility to financially support their children than parents did in the past.

At the same time, nearly three-quarters of respondents said investing feels more complicated than it used to and they want more guidance when deciding where to invest.

The panel emphasized that greater access to information has not necessarily created confidence. Investors’ access to social media, online investing platforms and artificial

intelligence tools, along with cryptocurrencies and market volatility, has complicated how younger generations approach investing.

Gen Z investors are increasingly relying on digital sources for guidance. The survey found 47% use social media for financial information and 22% use generative AI tools, compared with 24% who reported relying on traditional financial institutions or advisers.

Despite interest in newer investment options, traditional investing remains the preferred path for long-term wealth building. While nearly half of Gen Z and Millennials said investments such as cryptocurrency are appealing, 76% of Gen Z and 79% of Millennials said traditional investing—in stocks and bonds—remains the best way to achieve long-term financial goals.