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Is a home a good investment?  Most Americans think so.  A recent poll by Gallup indicated that owning a home was ranked ahead of gold, stocks, mutual funds, savings accounts, and bonds as the best long-term investment.  Interestingly enough, from 1890-1990, real home prices (inflation-adjusted) rose a mere 0.2% annually, with a virtual flattening of values the last 25 years.  Meanwhile, the S&P 500 has garnered more than 6% in inflation-adjusted average annual return.  Bonds were half that number, and gold somewhere in the 4% range over the past 33 years.  Sizeable differences, for sure, that may surprise most.  A home is an important investment that can offer us protection, well-being, a place to raise a family, and countless other intrinsic benefits.  Looking at it as an investment with the expectation of significant return might be disappointing.  Stay diversified.

 

 


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