Millennials are facing harsh financial decisions that previous generations rarely confronted, courtesy of a tight housing market with sky-high prices. A recent study from the Nationwide Retirement Institute reveals that 58% of millennials feel they must decide between buying a home and securing their retirement.
It was common for older generations to use real estate as a primary wealth-building tool. However, many Americans between the ages of 29 to 44 now feel that homeownership can undermine their long-term financial comfort. Thirty-five percent of millennials see rising housing costs as the biggest hurdle to retirement security, while 46% believe mortgage or home equity loans are the greatest threat to a stable retirement.
Millennials Remain Largest Homebuying Group Despite Challenges
This recent pressure is already changing financial behavior. Sixty percent of millennials have adjusted their retirement plans since the start of 2025, due to escalating housing costs. Many are now prioritizing retirement accounts over homeownership, marking a major shift in wealth-building strategy.
However, Ralph DiBugnara, founder and president of Home Qualified, points out this survey section of millennials is likely part of the group that didn’t purchase a home during the buying frenzy between 2019 and 2022. Since 2014, the millennial age category has represented the largest percentage of home buyers in the country. In 2022, this number hit a whopping 43%.
“Millennials are experiencing more of a financial crunch because of increased interest rates, a rapid rise in the cost of living, and higher home prices,” said DiBugnara. “That, along with slow wage growth, has made the decision tougher.
“But on the flipside, the millennial generation probably benefited the most from the housing boom between 2019 and 2022. They were largest buying population of that time. For the millennials getting a late start and trying to buy in 2025, it’s going to be much harder.”
Property or Retirement: How to Decide
Millennials are taking steps to strengthen their financial footing for retirement. According to the survey, half have opened retirement accounts such as 401(k)s or IRAs. Twenty-eight percent want to bulk up contributions to their employer-sponsored retirement plans in the next 12 months, and 23% say they will contribute the maximum amount eligible for an employer match.
However, plenty of 30- and 40-somethings are making sacrifices to invest in a home, including relocation, smaller homes, and tighter budgets. So how can millennials decide which investment to prioritize?
Chad Gammon, owner of Custom Fit Financial, feels millennials caught between two choices can benefit from speaking with a financial planning expert to lay out the reality and meaningfulness of their decision.
“I am familiar with millennials feeling the strain of retirement savings versus homeownership and it aligns with what I am seeing,” said Gammon.
“I like to focus on what homeownership versus retirement means to each person or couple. Questions like these can lead to deep discussions and help them decide what is best for them. Sometimes, they realize the current investing they’re doing is fine for their current stage of life. They do not need to feel the pressure of maxing out retirement savings. It can be more of a balance and talking this through can help.”
Why Real Estate Still Matters
DiBugnara feels that no matter how you slice it, homeownership is still a great investment for the future. Homes purchased by millennials in the current market can still be their ticket to a comfortable retirement, if they stay financially responsible, remain in the home for the next decade or more, and accept the realities of reducing their overall spending.
“Real estate is a long-term investment no matter what decade or generation you’re from, said DiBugara. “Buying a home today still can act as a savings for retirement, if you plan on living in the house long-term.
“Most millennials have 15 to 20 years before retirement and will see massive growth in their investments in real estate in that period. Yes, they will have an immediate month-to-month sacrifice because of increased costs. However, as a long-term investment, mortgage rates will likely come down, their investment value will grow, and they will have a chance to bring that fixed payment down while hopefully increasing their wages over that period.”
What Millennials Can Do Now
• Weigh your priorities. Consider what homeownership or retirement means to you personally before making a major financial move.
• Seek expert advice. A financial planner can help you map out the real impact of buying a home versus saving for retirement.
• Stay financially realistic. If buying a home, plan to hold it long-term, reduce spending, and focus on responsible money management.
• Invest consistently. Keep contributing to retirement accounts like 401(k)s or IRAs, even if homeownership feels out of reach for now.
• Think long-term. Real estate remains a potential path to future wealth if you stay committed and financially stable over time.
The Bottom Line: Millennials are facing tough choices between homeownership and retirement savings, but the key lies in balance. While many are prioritizing long-term security through retirement accounts, experts say buying a home can still be a smart move, if approached with patience, financial discipline, and a long-term outlook.
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