What It Takes To Be Considered Wealthy in 2025—and How Real Estate Can Help

view original post

Money can’t buy happiness, but perhaps real estate can.

The meaning of what it takes to be wealthy can vary based on individuals’ perspectives and priorities. Yet, the Charles Schwab Modern Wealth Survey for 2025 revealed that, while the dollar figure to be considered “wealthy” has dipped from last year—now at $2.3 million in net worth, down from $2.5 million in 2024—it’s still far beyond what the average American has.

The survey also underscored shifting attitudes, as Americans also define wealth in terms of happiness, a priority they put on par with financial wealth.

Sergio Altomare, co-founder and CEO of Hearthfire Holdings, a real estate private equity and development company, says the decline in the dollar figure reflects a shift in American values, with more people prioritizing homeownership, financial stability, and smart investing over simply having a high salary.

The survey found that inflation, high housing costs, stubborn mortgage rates, and generational trends have also changed perceptions of wealth. And yet, experts agree that no matter your age, owning real estate remains one of the most reliable paths to achieving it.

What the 2025 wealth report says about today’s homeowners

Several macroeconomic factors have been taking a toll on Americans’ wallets in recent years.

Unsurprisingly, the Schwab survey found that 73% of respondents cite the cost of living/inflation as the top obstacle to building wealth.

It also found that 43% point to high interest rates, which directly affect mortgage affordability and access to credit.

“These pressures are real, but they also reinforce the importance of building equity,” Steve Sexton, CEO of Sexton Advisory Group, tells Realtor.com®.  “Wealth isn’t just about income. It’s about what you own and how liquid or productive those assets are. That’s why I always emphasize home equity, smart investing, and managing cash flow over chasing a bigger paycheck.”

To that end, Schwab asked respondents to define what “wealthy” means to them—and the answers extended far beyond finances. The top response, chosen by 45%, was “happiness,” followed closely by “the amount of money I have,” at 44%.

Other commonly cited definitions included “physical health” (37%), “mental health” (32%), and “quality of my relationships” and “life experiences” (each at 24%). Meanwhile, 20% equated wealth with “accomplishments,” 18% pointed to “amount of free time,” and 17% selected “material possessions” as a defining factor.

Generational gaps in wealth—and how homeownership fits in

While the above numbers take into account all of the people surveyed, responses got more interesting when you break it down by generation.

When asked in the survey how much is needed to be considered wealthy, Gen Z respondents said it takes about $1.7 million to feel wealthy, while millennials and Gen X shared a similar benchmark close to the average, both estimating $2.1 million. Baby boomers, however, set the bar higher, at $2.8 million.

Interestingly, when asked how much is needed to feel financially comfortable, for Gen Z, feeling financially comfortable starts at $329,000. Millennials aimed a bit higher, citing $847,000 as their comfort threshold. Gen X raised the bar again, saying they need $783,000, while boomers believe $943,000 is the mark for comfort.

Given the financial challenges younger generations face—such as student debt and high housing costs—it’s surprising that their expectations for wealth and comfort are significantly lower than those of older generations.

Then again, 33% of Gen Z and 20% of millennials said that saving for a downpayment is the most challenging step of the homebuying process, according to the 2025 National Association of Realtors® (NAR) Home Buyers and Sellers Generational Trends study.

According to the NAR survey, Gen Z Americans made up a meager 3% of all homebuyers, the smallest share of any generation.

Meanwhile, older generations such as Gen X and boomers benefited from a friendlier environment and much lower mortgage rates. They continue to benefit from long-term homeownership, helping them stay above the wealth benchmark.

Sexton notes a real divide among generations regarding how wealth is built.

He says that Gen Z and millennials are more focused on financial stability and meaningful experiences, and many are skeptical of committing to a mortgage early.

“But Gen X and boomers have benefited from decades of homeownership and have built up equity as a result. That long-term asset growth is one of the reasons they remain closer to or above the ‘wealthy’ benchmark. Real estate has given them leverage that younger generations are still trying to build,” he adds.

Why owning real estate remains one of the most powerful paths to wealth

Despite the many challenges that pave the road to homeownership, owning a property is still one of the smartest ways to grow long-term wealth. And there are several reasons for that.

First, home values have increased nationwide in the past 10 years, underscoring how patience can pay off. Realtor.com data found that since 1975, “the average five-year return on U.S. home prices has been +26%.” Meanwhile, “the average 10-year return on U.S. home prices has been  +57%.”

Additionally, today, roughly 1 in 3 homeowners—nearly 29 million households—has built up more home equity than the federal capital gains tax exclusion for single filers protects when they sell their primary home, according to a recent analysis by the NAR. By 2030, that number is expected to grow to 56% of homeowners.

“That kind of equity creates flexibility and options. I always advise clients to be thoughtful with how they use it. Equity shouldn’t be tapped for lifestyle upgrades, but it can be a powerful financial tool if reinvested wisely or used to reduce debt and improve liquidity,” Sexton says.

Altomare agrees, saying that having equity in a home becomes a real buffer. It’s not just a place to live; it’s a financial asset that can protect you and even help you invest further.

“Think of it as a forced investment plan that actually counteracts the inflation that we see day in and day out,” he says.

Another key benefit of homeownership is that it builds generational wealth—homes are one of the most commonly inherited assets during the Great Wealth Transfer.

As Altomare notes, real estate acts as a hedge against inflation: When prices rise, so does your property value. It’s also a form of forced savings: Every mortgage payment builds equity.

“Equity doesn’t just benefit the current owner. It builds generational wealth that can be passed down, used for co-signing loans, or even leveraged further for investments in a world where younger generations struggle with student debt and high living costs. Real estate offers a path to closing those wealth gaps,” he adds.

Related Articles