Real Estate vs Stocks at 22: The Real Math (Who's Richer at 60?)

Real estate vs stocks, raced with real numbers. Twins start at 22 with the same $500 a month: one saves for a house, his brother rents and invests in an index fund. Who's richer at 60, and why does the Federal Reserve find the typical homeowner is worth 43 times as much as the typical renter? Explainer, not financial advice. Sources below. How the race works (our own example model): both twins have the same monthly budget. House and rent prices grow 4% a year, stocks return 10% a year (7% tested too), savings earn 4%. The house twin puts 10% down plus 3% closing costs, takes a 30-year fixed loan at 7.40%, and pays property tax of 0.86% and repairs of 2% of the home's value each year, plus $2,267 of insurance a year that grows with prices. His net worth counts 6% selling costs. The stock twin rents a similar 3-bedroom house and invests the difference. Taxes, mortgage insurance and inflation are left out, as the video says. All results are in future dollars; divide by about 2.1 for today's money at 2% inflation. Example figures from our own model; past returns don't predict future returns. SOURCES Homeowner vs renter net worth (43x), income, and net worth by age: Federal Reserve, Changes in U.S. Family Finances from 2022 to 2025, Tables 1 and 2 https://www.federalreserve.gov/publications/files/scf26.pdf Typical US home value $366,913, September 2026: Zillow https://s25.q4cdn.com/975009107/files/doc_news/Zillows-September-Market-Report-shows-an-early-winter-in-the-housing-market-as-newly-pending-sales-fall-8-5-2026.pdf First-time buyers' median age 40, down payments, 11-year median stay: National Association of Realtors, 2025 Profile of Home Buyers and Sellers https://www.nar.realtor/news/real-estate-news/nar-2025-profile-of-home-buyers-sellers-reveals-market-extremes Home prices up about 4.3% a year since 1991: FHFA purchase-only house price index (FRED) https://fred.stlouisfed.org/series/HPIPONM226S S&P 500 about 10.7% a year with dividends since 1957 https:/

Added 20 Oct 2026