Young Americans are giving up on homeownership, leading to risky financial behaviors. Research shows that renters who abandon the dream of owning a home are more likely to spend money, slack off at work, and take on risky investments. This trend could have long-term economic consequences as homeownership rates decline.

The consequences of giving up on homeownership can be far-reaching, impacting work effort and financial decisions. Renters who believe they will never be able to afford a home tend to spend their savings on consumption rather than saving for the future. This behavior shift could reshape the economy over time as more young Americans abandon the goal of owning a home.

Researchers project that those born in the 1990s will retire with a homeownership rate significantly lower than their parents. By age 30, 15% of these individuals have already given up on buying a home. This shift in behavior could lead to a widening wealth gap between those who continue to pursue homeownership and those who resign to renting forever.

Renters who believe homeownership is out of reach exhibit higher risk tolerance in investments, particularly in volatile assets like cryptocurrency. This behavior stems from the perception that they have less to lose financially compared to those on track to buy a home. The divide in risk tolerance between these two groups could impact wealth accumulation and financial security in the long run.

For those resigned to renting, there are still ways to build wealth and secure financial stability. Strategies include investing automatically, boosting retirement contributions, and exploring real estate investment trusts (REITs) for passive income. These tactics can help renters accumulate wealth over time and work towards financial goals despite the challenges of homeownership.

Read more at Yahoo Finance: What happens when young Americans give up on owning a home? The way they live, work and invest may reshape the economy