Why the American Dream Is Losing Out to the S&P 500

”I have to live somewhere.” A home for sale in Crockett, Calif. (David Paul Morris/Bloomberg)

Key Points

A National Association of Realtors survey found the lowest share of recent home buyers since 2006 said buying a home beats stocks as an investment.
Only 32% of surveyed buyers said housing was a better investment than stocks, down from 35% in 2025.
The shift in perception comes as the existing-home sales market faces its fourth consecutive full year of slow sales and blunted price growth.

Buying a home just doesn’t carry the same investment appeal it used to.

Just ask this year’s slate of home buyers. Fewer recent buyers—than any time since 2006—told the National Association of Realtors that buying a home beats stocks as an investment. That’s according to the results of the trade group’s annual survey of home buyers and sellers, released Thursday.

The data illustrate a slow-burning shift in the perception of housing as the home price surges that defined the pandemic era move further into the past. Today’s housing market drudgery, it seems, may have finally rid buyers of the expectation that a return to low mortgage rates and booming prices are right around the corner.

“Projections of the house prices from forecasters, myself included, are pretty low over the next, say, five, 10 years,” says Cristian deRitis, the deputy chief economist at Moody’s Analytics. “From an investment perspective, you probably would certainly view a house less favorably today than in the past, when we had expectations for faster growth.”

Of those surveyed, 32% said they view buying a house as a better investment than stocks—down from 35% in 2025 and as many as 52% in 2006. The data is based on responses from 7,125 households who purchased a primary residence between July 2025 and June 2026. Responses were solicited in July 2026.

Home buyers tend to be a sanguine bunch when it comes to the financial appeal of homeownership, with almost 80% saying housing remains a good investment. That’s a clean majority, but near the record lows set in 2011 and 2012.

Don’t underestimate the appeal of a broader stock market which, perhaps until this past week, appeared unstoppable. “We know the stock market has been hitting record highs,” says Jessica Lautz, the National Association of Realtors’ deputy chief economist. “Home price growth in the past year has slowed.”

The expectation that price gains will putter out could drag on home demand, Barron’s reported recently. Buyers, after all, have little incentive to pounce on a relatively pricey fixed mortgage payment for 30 years.

Since the survey was mailed— yes, mailed!— to recent home-buyers, mortgage rates have climbed above 7%, to a recent 7.18%. That increase—and the expectation that price growth will chill as a result—is likely a further ding to house hunters’ intentions to buy.

A shift away from seeing housing as a hot investment might not be all that bad. Today’s mortgage rates are a jump from pandemic-era lows and the roughly 3% to 4% rates that were the norm in the wake of the 2008-09 financial crisis. But they’re far from unprecedented.

Buyers have “perhaps lost perception of what a normal housing market actually looks like,” says Moody’s Analytics’ deRitis. The ongoing housing market doldrums could be an antidote: “We’re just wringing out the excesses and coming into a new equilibrium.”

The decision to buy a home is seldom entirely financial. In addition to a comparison to rental costs and market factors such as the number and variety of homes for sale, one’s personal needs play a big part.

After all: “I have to live somewhere,” says deRitis. “I want to live somewhere that I like, that meets all my needs, in terms of being close to my job, family, school, what have you—so it isn’t just a simple investment decision.”

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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