Why do people buy homes when the stock market has outperformed it for years?

Question

Why do people buy homes when the stock market has outperformed it for years?

Answer 1

Leaverage

Answer 2

It's the "perception" of safety that makes people prefer real estate over the stock markets. Of course, when you add the lending / credit market to real estate that it becomes a potentially dangerous situation.

Answer 3

Well we all need a place to live. Owning is better than renting as if property appreciates you'll have a gain where if you are renting, then rents just go up. And then there are the tax advantages of deducting mortgage interest and real estate taxes. Now if you're talking about buying a home as an investment rather than a place to live, I agree with you.

Answer 4

David M hit all the high points.  I would also say its a matter of diversification.  Real estate is a different asset class and is a hedge against inflation.  Where inflation is bad for the stock market in the short run.

Answer 5

1) Security. Even if the stock market crashes, chances are that the housing market won't be crashing as fast.

2) Winnings: if you put some work into a house, you can actively affect its value. If done correctly, you can buy some houses way below market price, due to bank auctions and similar events. In the stock market, this is a lot harder.