A new study suggests that America’s housing crisis is reshaping how young people think about money. With homeownership slipping further out of reach, many young Americans are shifting toward high-risk cryptocurrency bets, cutting back on work effort, and spending more on leisure.
The research—conducted by economists Seung Hyeong Lee of Northwestern University and Younggeun Yoo of the University of Chicago—was published on November 19, 2025. It analyzes credit card behavior, wealth patterns, and financial attitudes to reveal a clear trend: when housing becomes unaffordable, young people lose motivation to save in traditional ways.
According to the economists, this shift isn’t accidental. Their data shows that rising house price-to-income ratios are directly causing what they call “financial nihilism” — a belief that long-term financial goals like buying a home are no longer realistic. As a result, many young adults choose short-term enjoyment or take bigger investment risks instead.
Meanwhile, those who still see homeownership as achievable behave very differently. They save more, avoid risky investments, and maintain a more disciplined approach to money.
Verified Housing Price Surge
Fresh data from the Federal Housing Finance Agency (FHFA) confirms that U.S. home prices continue to climb, adding more pressure to an already stretched housing market. According to the FHFA House Price Index, national home values rose 2.2% between Q3 2024 (683.84) and Q3 2025 (706.04). Although quarterly growth has slowed—with prices inching up just 0.2% from Q2 to Q3—this marks more than a decade of uninterrupted annual price increases since 2012.
The affordability challenge is becoming even more severe. Nationally, the price-to-income ratio has surged by roughly 40% since 2000, creating a widening gap between wages and home prices. For Americans under 35, the math is especially tough: the median income for this age group sits around $45,000, while the median home price has climbed to nearly $420,000.
The result is a housing market where ownership is slipping further out of reach, particularly for younger buyers trying to enter the market for the first time.
Global Parallels and Implications
This trend isn’t limited to the United States. Countries like the UK, South Korea, and Japan are seeing similar shifts, where rising housing costs are pushing young adults toward cryptocurrency trading and even gambling as alternative financial paths.
Economists warn that this behavior can trap many young people in long-term low-wealth situations. While crypto can deliver explosive gains—Bitcoin is up 150% year-to-date—it can just as easily swing into a 50% loss, making it far less reliable than building equity through homeownership.
Policymakers do have options, such as expanding affordability programs or offering incentives for first-time buyers. But with mortgage rates hovering around 5.5% and wages barely moving, the appeal of fast, high-risk investments like crypto continues to grow.