Traditional financial advice typically tells savers to put retirement first — even before homeownership. That’s because over the long-term, the stock market tends to outpace real estate and there are tax advantages to putting money in a retirement account.
But retired homeowners are in a much better financial position than their peers who have rented. So it might make more sense to encourage younger savers to prioritize buying a home, despite the very real challenges of high home prices and interest rates.
Millennials have higher average 401(k) balances than Generation X did when they were the same age, but they're not any better off financially, says Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute. A lot of that has to do with being less likely to own a home. That doesn’t bode well for later on.
