Plus there are intangibles: Owning a home provides a sense of independence, security, and community. And you get to live in your investment. You cannot do that with a stock.
Of course, historical trends do not pay the mortgage. People who wade in and out of the housing market too often, or who buy at the wrong time or price and need to sell quickly, can get burned.
But if you own for a decade or more, price appreciation usually overcomes even bad slumps.
Tony and Liz Iacobelli, who are far under water on the home they bought in the Phoenix suburb of Buckeye three years ago, are not panicking. They owe about $177,000 on their mortgage on a house worth only $132,000, which is about 40 percent of what they paid.
"Houses generally go up in price, and this one will again, too," said Tony Iacobelli, 51, a retired New York police officer.
Several booms and busts have occurred in the modern era of housing, which began when 30-year loans became widely available after World War II. This bust has been severe: Nationally, home prices are down an average of 30 percent from their peak in 2006.
The collapse of the housing market may have put an end to the notion of using a home as a speculative investment akin to a hot stock. And that may not be a bad thing, economists say.
"People should recognize that value comes from a lot of other things besides a possible return on the investment," said Joel Naroff, chief economist at Naroff Economic Advisors in Bucks County.
