Daily Global Analysis By zForex

[Z Forex]

Stocks Have Beaten Housing Over the Long Run​

Over the past 50 years, US stocks have delivered much stronger returns than home prices.

Since 1975, the S&P 500 has produced an average annual total return of 12.2%, including dividends. US home prices increased by around 5.1% per year over the same period.

Even without dividends, the S&P 500 returned about 9.3% annually. That still leaves stocks well ahead of the housing market.

The gap becomes wider after inflation. Real stock returns averaged 8.3% per year, compared with only 1.4% for home prices.

The takeaway is simple. Housing can provide stability, rental income, and leverage, but stocks have been the stronger long-term wealth-building asset based on historical returns.