📊 The Economist on how households in developed countries are increasingly making money from stocks rather than real estate.
And that, for a moment, is a reversal of a twenty-year trend🫡.
According to the McKinsey Global Institute, of the $40 trillion increase in global household wealth in 2025, 57% came from stocks and just 15% from housing. Over the previous 25 years, real estate accounted for an average of 52%, while stocks made up 26%. In the US, according to Goldman Sachs estimates, stocks overtook real estate in the composition of household wealth for the first time since World War II this July.
There are several reasons.
▪️Housing is still very expensive, so young people can’t afford to buy it—and are turning to the stock market instead. JPMorgan says the share of 25-year-olds with investment accounts increased sixfold from 2015 to 2024.
▪️High interest rates are holding back home prices, and Moody’s Analytics expects annual growth of just 2.1% in the US, compared with 5% over the past decade.
▪️Meanwhile, governments are scaling back incentives for buyers and strengthening protections for renters.
At the same time, stocks are now valued at record highs, so wealth is simply shifting into a more volatile asset.
And that, for a moment, is a reversal of a twenty-year trend🫡.
According to the McKinsey Global Institute, of the $40 trillion increase in global household wealth in 2025, 57% came from stocks and just 15% from housing. Over the previous 25 years, real estate accounted for an average of 52%, while stocks made up 26%. In the US, according to Goldman Sachs estimates, stocks overtook real estate in the composition of household wealth for the first time since World War II this July.
There are several reasons.
▪️Housing is still very expensive, so young people can’t afford to buy it—and are turning to the stock market instead. JPMorgan says the share of 25-year-olds with investment accounts increased sixfold from 2015 to 2024.
▪️High interest rates are holding back home prices, and Moody’s Analytics expects annual growth of just 2.1% in the US, compared with 5% over the past decade.
▪️Meanwhile, governments are scaling back incentives for buyers and strengthening protections for renters.
At the same time, stocks are now valued at record highs, so wealth is simply shifting into a more volatile asset.