You Don't Need to Own a Home to Build Wealth. Here Are Other Places Americans Are Putting Their Money

You may have more wealth-growing options than you thought.

There are many financial benefits to owning a home, including the fact that homeownership often serves as a wealth-building tool. That's because homes have a tendency to appreciate in value over time, so if you buy a home for, say, $300,000, in 20 years, it may be worth $600,000, $900,000, or more.

Meanwhile, it's hardly a secret that the housing market has been extremely challenging for buyers since the latter part of 2020. And this year has been even tougher for home buyers thanks to rising mortgage rates.

It's not surprising, then, that Americans are starting to change their views on homeownership. In fact, in a recent survey by Personal Capital, 43% of respondents said that owning a home is just one of many ways to build wealth. And between sky-high home prices, expensive mortgage rates, and fears of an upcoming recession, 25% of those surveyed now say they'll be delaying a home purchase indefinitely.

But it's not as if those people are giving up on building wealth. Here are some of the other places they're opting to put their money instead.

1. Retirement accounts

A good 42% of those surveyed said they're committed to contributing funds to retirement accounts like Roth IRAs or 401(k)s. These plans are a good bet for growing long-term wealth because they're loaded with tax breaks.

Of course, the downside is that these accounts require savers to leave their money alone until age 59 1/2. But given that they're supposed to be used during retirement and not before, that makes sense.

2. High-yield savings accounts

For 36% of respondents, a high-yield savings account is a tool that's making it possible to grow wealth. Now the reality is that it's important not to overfund a savings account, because even when these accounts pay generous amounts of interest, they only offer limited wealth-building opportunities. But right now, savings account rates are up, and padding one may not be a bad idea (especially given the potential for a recession).

3. Individual stocks

A good 25% of those surveyed say they're putting money into individual stocks. And that's a smart bet on the road to growing wealth over many years.

The reality is that the stock market can be volatile, and buying stocks in a brokerage account means taking on risk that doesn't come into play with a high-yield savings account. But the returns a stock portfolio has the potential to generate might well exceed the amount of interest a savings account will pay.

Carve out your own path

Whether you're frustrated with today's housing market, you're not interested in owning a home because of all the work and expense involved, or both, you should rest assured that you have plenty of options for growing wealth and increasing your net worth over time that don't involve you buying a place to live in. So if that's not a route you want to take, don't sweat it, and don't assume you're destined to never meet your long-term financial goals.