Unable to Afford Homes, Young People Are Giving up on Saving and Turning to Reckless Financial Habits

For generations, the promise was simple: work hard, save steadily, buy a home, and build a stable life. For many young adults today, that script has collapsed. Soaring house prices, heavier debt burdens and stalled wages have pushed homeownership so far out of reach that some are quietly abandoning the dream altogether. Instead of funneling every spare dollar into a distant down payment, more are choosing to spend on comfort now, or taking high-stakes bets on cryptocurrencies and other volatile assets that might, just might, change everything overnight. Others are questioning why they should go “above and beyond” at work when the usual rewards feel unattainable anyway. Beneath the stereotypes about laziness and irresponsibility lies a more unsettling story: growing numbers of young people are not simply mismanaging money—they are responding, sometimes destructively, to a financial future that no longer seems built with them in mind.

When Homeownership Stops Feeling Possible

For many young adults, homeownership has quietly shifted from a life milestone to a fading mirage. Economists Seung Hyeong Lee and Younggeun Yoo estimate that people born in the 1990s will have homeownership rates around 9.6 percentage points lower than their parents’ generation by retirement, reflecting a steep, long-running decline in housing affordability.

This is not just about frustration; it is about a fundamental change in how a generation thinks about the future. Their study, based on detailed data on card transactions, wealth and attitudes, shows that renters who no longer believe they will ever afford a home start behaving measurably differently from those who still think ownership is within reach. The hopeful group tightens budgets and works harder; the discouraged group gradually abandons long-term financial planning.

The backdrop is stark. Across large parts of the US and UK, house prices have become unaffordable for ordinary earners, and for many first-time buyers the main obstacle is not income but the down payment hurdle, which can reach six-figure sums. Over just five years, typical mortgage payments have jumped by an estimated 82%, while median incomes have risen only 26%, eroding any sense that careful saving alone can close the gap.

As Financial Times data journalist John Burn-Murdoch notes, applying oneself at work “used to be a means to an end.” With the perceived reward of a home “yanked out of reach,” many young adults are not simply disengaged; they are recalibrating their effort and money around a future that no longer includes a front door of their own.

From Saving to Splurging: When “Reckless” Starts to Feel Rational

Once the prospect of owning a home slips out of reach, many young adults are not merely giving up on a goal; they are rearranging their entire financial behaviour. Lee and Yoo’s research finds that renters who no longer expect to buy a home save less, work less, and take on far more financial risk than peers who still see ownership as possible.

Instead of building a down payment fund, discouraged renters tend to redirect money toward small luxuries and entertainment—purchases that offer immediate comfort when long-term goals feel futile. The study suggests this is not simple indulgence, but a psychological response to a bleak outlook: if the traditional path to security seems blocked, today’s pleasures gain more weight than tomorrow’s plans.

At the same time, risky assets become more appealing. Cryptocurrencies, speculative stocks and even online betting are treated as potential escape hatches—low-probability but high-impact chances to leapfrog the housing hurdle in one stroke. Commentator Demetri Kofinas describes this mindset as “financial nihilism”: why diligently save if conventional prudence appears powerless against soaring prices and stagnant wages?

Crucially, the research indicates these patterns are causal, not coincidental. As local housing affordability worsens, upticks are observed in leisure spending, high-risk investing and a decline in work effort. Rather than being locked out of homeownership because of frivolous spending, many young people become financially reckless precisely because they believe they are locked out.

In this light, what older generations often label irresponsibility looks more like a harsh economic calculation. If the traditional rules—work hard, save steadily, buy a home—no longer seem to work, it is hardly surprising that a growing share of young adults decide to stop playing by them.

Work, Motivation, and the Rise of “Why Bother?”

The housing crisis is not only reshaping bank balances; it is reshaping how young adults see work itself. In Lee and Yoo’s study, renters who still believe homeownership is achievable tend to increase their labour effort, taking on extra hours and exercising more discipline with money. Those who have mentally written off the possibility respond very differently, cutting back on effort and focusing less on promotions or pay rises that no longer seem transformative.

This helps explain why Gen Z is so often described as lacking resilience or “quiet quitting” in the workplace. Many young employees have publicly questioned the point of going above and beyond in jobs that do not offer a realistic route to stability. Financial Times journalist John Burn-Murdoch argues that it is not that earlier generations found work more fulfilling, but that “applying oneself at work used to be a means to an end.” With the reward of owning a home “yanked out of reach, the whole thing feels futile,” he writes.

Lee and Yoo’s findings suggest that this sense of futility is not mere attitude; it is a rational response to deteriorating incentives. If a six-figure deposit is required regardless of incremental pay rises, staying late at the office can start to feel like a bad trade-off compared with preserving time, energy and mental health.

The result is a subtle but powerful shift: work is reclassified from a long-term investment into a short-term transaction. Young adults still meet their basic responsibilities, but the emotional bond between striving and future security is fraying. In a labour market that continues to reward hustle, this growing detachment not only affects individual careers—it risks weakening one of the core psychological levers that modern economies rely on.

The Wealth Trap and Its Generational Shockwaves

When young adults give up on homeownership, the impact is not confined to a single frustrated decade; it reshapes lifetime wealth and the prospects of the next generation. Lee and Yoo’s modelling shows that renters who abandon the goal of buying a home quickly diverge from similar peers who keep trying. Starting from comparable net worth, the “discouraged” renter repeatedly hovers near zero wealth, while the “hopeful” renter gradually accumulates assets and narrows the gap with existing homeowners.

The mechanism is simple but brutal. Without a home, there is no “forced saving” through mortgage payments. Realtor.com senior economist Jake Krimmel notes that one of the clearest advantages of owning is that part of each monthly payment builds equity automatically. This slow, steady compounding is difficult to replicate through ad hoc saving—especially if money is instead flowing into short-term comforts or speculative bets.

By contrast, trying to shortcut the process through high-risk investments rarely delivers. As Krimmel puts it, “Trying to hit the lottery through speculating on financial assets from your phone—however fun it might be—is almost certain to fail in the long run.” Losses deepen the wealth gap further, leaving discouraged renters even less able to re-enter the housing race.

The consequences stretch beyond individual households. Lee and Yoo warn that because children of homeowners are statistically more likely to become homeowners themselves, giving up on buying can become “a transmission mechanism that entrenches and amplifies wealth inequality over generations.” In a world where today’s 20-somethings are far more likely to remain lifelong renters, the stakes are not just personal—they are structural, shaping who gets to build security and who remains permanently exposed to rising costs and fragile wages.

What Needs to Change

The behaviours often criticised in young adults—risky investing, “YOLO” spending, scaling back at work—are not emerging in a vacuum. Research by Lee and Yoo, alongside analysis from Financial Times journalist John Burn-Murdoch, shows they are closely tied to a housing system in which ownership is drifting out of reach for many. Labelling a generation as careless obscures a harder truth: people are adapting, however imperfectly, to a game that feels unwinnable.

That does not mean every response is healthy or sustainable. Turning to speculative assets or giving up on long-term planning can trap individuals in exactly the precariousness they are trying to escape. As commentator Demetri Kofinas warns through the idea of “financial nihilism,” abandoning the future because it feels impossible can become a self-fulfilling prophecy.

The implications run on two tracks. Systemically, governments and regulators face mounting pressure to tackle housing affordability—through planning reform, targeted support for first-time buyers, and policies that curb speculative pressures in property markets. Without structural change, each new cohort risks becoming more resigned, more unequal, and more willing to gamble.

Individually and culturally, there is a need to shift the narrative from blame to guidance. Young adults navigating lifelong renting will require clearer routes to build assets outside of property and stronger financial education to evaluate risk, not just chase it. Realtor.com economist Jake Krimmel stresses that wealth-building “is a slow process” powered by compounding, not quick wins from a trading app.

Burn-Murdoch notes that younger generations are “just playing the cards they have been dealt.” The real test now is whether institutions, families and employers are willing to reshuffle the deck—by making housing fairer, risk more transparent, and long-term planning feel worth the effort again.