'Your house is not an asset'—Analyst pours cold water on housing investment thesis
The long-held belief that a home is Americans’ greatest asset is facing renewed scrutiny, especially when compared with the performance of other investments. New data suggest real estate may no longer be the sure path to wealth it once was.
According to Federal Reserve and FactSet data, $100 invested in a U.S. home in 1970 grew to about $1,700 by April 2025, based on median home prices and not adjusted for inflation.
By comparison, the same $100 invested in the S&P 500 Index surged to roughly $6,900 over the same period.
Both measures are indexed to a baseline of 100 in 1970, allowing for a clear, apples-to-apples view of how housing has lagged behind stocks over the past half-century.
“Your house is not an asset,” said Spencer Hakimian, founder of Tolou Capital Management.
Tolou Capital Management’s Spencer Hakimian commented on the data, saying emphatically, “Your house is not an asset.”
While that statement may be overstated, it reflects a growing recognition that homeownership is no longer the guaranteed wealth builder it was for previous generations, especially as stock market returns, fueled by technology and AI growth, have vastly outpaced housing appreciation.
As JPMorgan Chase noted in a recent report, Housing conditions “may be shifting the allocation of savings, making financial assets like stocks relatively more attractive or accessible than home equity,” JPMorgan Chase said in a recent report.
Housing affordability challenges persist
For many Americans, if homeownership no longer guarantees long-term wealth building, it’s becoming even harder to justify given today’s affordability crisis.
Elevated home prices and persistently high mortgage rates have made it increasingly difficult for new buyers to enter the market.
Even existing homeowners aren’t immune. Many are now considered “cost-burdened,” a term used to describe households that spend more than 30% of their gross monthly income on housing and related expenses, such as taxes, insurance, and maintenance.
In August, CBRE Investment Management described the U.S. housing market as being at a “crisis level” — a condition that continues to dominate market dynamics.
Even before the latest price surge, homeownership had already become more expensive than renting. A 2024 InvestorsObserver study found that, over a 23-year period, it cost about $88,000 more in cumulative expenses to own a home than to rent one.
To be sure, homeowners still build equity over time and benefit from potential price appreciation.
However, the main challenge today lies in managing the steep upfront and ongoing monthly costs, from mortgage payments and property taxes to maintenance and insurance, which are rising faster than incomes in many parts of the country.