Historically over the last 100 years, is buying a house a better investment than the stock market?

Answer 1

If they would loan you as much money to buy stock, as they do to buy the house, and you were right, then there's no question that stocks would outperform.

I don't generally think of a house as an investment, any more than a car is an investment. You don't buy a house expecting capital gains, but merely to live in.

An "investment" is actively managed, with an expectation of higher returns. It is generally liquid, and can be sold in one day. Real estate is in a different world, and a house falls outside the definition.

I'm a trader, so a house, to me, is a dead asset. It ties up a huge sum of money that I could otherwise use to earn superior returns. And like buying a house, I use leverage in trading futures, and my account was up 41% last month. A house will never do that in a year, let alone one month.

Answer 2

My guess would be that buying LAND would've been the best investment over the last 100 years.

Not sure a house that is 100+ yrs old would be a good investment (though the land underneath it would), and not sure the stock market was around 100 years ago. Besides if you did buy stock 100 yrs ago, it surely would've lost most of its value in 1929 when the stock market crashed and then you'd have to start out at ground zero again. Now, buying stock in 1930 or so, that would be a great investment -- talk about "buying low"!

Answer 3

There is no real answer to this question.

Real estate is heavily dependent on where it is located, the stock market on the portfolio of stocks and how well they were distributed and traded over a 100 years.

There is no reliable index for home real estate over 100 years and certainly not for the mutiplicity of type and geographic markets.

The advantage of the stock portfolio over 100 years is the ability to change it as times and economy changes. A home is stuck where it is. A home requires substantial maintenance cost, taxes etc over 100 years [not reflected by comparing prices at beginning and end].House is subject to obsolescence, so it is the land i.e. locatrion that is everything. Stocks earn money and pay dividends these are added to your investment and reinvested regularly gainin advantaeof compounding.

The advantage of a home is you and your descendents can live in it for 100 years, eliminating rent, and enjoying the pride of ownership that goes with a home. . You cannot manage or mismanage location, it turns out to be a good one or it doesn't, but over a hundred years you can mismanage a stock portfolio
with disastrous results. You need an impossibly patient point of view to invest for100 years.

On balance I would prefer 100 years in a managed portrfolio of stocks to get the best return.

Answer 4

Since time immemorial, a house or roof over one's head is a good investment. Provided if you have that security, the next step in investment would go either way.

Without taking in expenses and associated costs:
A house may give rise to capital gains and interest rates implicit in the lease.
The Stock market may give rise to capital appreciation and dividends.

The historical trend of the old world of less labour and intellectual mobility would be to place houses as a better bet. Due to the fixed capacity of resources available for utilisation, any changes is therefore largely restrained to existing demograpics.

Assuming the climate is one of non-protectionist policies, fluctuations of human capital, open market practices, land and therefore anything else performed on it is made good and enhanced by the underlying activities performed. The question then becomes why (rasion d'etre of a successful adventure), then to question where and when.

Answer 5

That is really not as easy to decided as it seems - If you are looking to buy a house and live in it long-term - then real-estate normally trumps the stock market (if you use the s&p 500 as your guide) but there are obviously no guarentees either way

Answer 6

Depends on the house. Depends on the stock market investment.

Fabulous thing about statistics, they prove a lot of different things from the same set of numbers. I love the old line, "There are lies, damned lies, and statistics."

Answer 7

historically, yes. the risk is less but the investment capital is obviously higher.

Answer 8

maybe not buying a house but real estate has always been a good bussniess