America was built on the idea of homesteading, and home ownership has been the centerpiece of the American Dream since for nearly 80 years.
But if your goal is to build wealth—regardless of the form—there’s powerful evidence that stocks are the way to go. Financial assets are far more liquid than real estate. You can buy small amounts without saving up for a five-figure down payment. You don’t need to take out a loan to buy stocks (and you shouldn’t!)
But most of all, the return on stocks during the last 35 years has obliterated the return on real estate.
In 1990, Americans held more than three times as much wealth in real estate than in stocks. The old adage was true: For most families, their home was their biggest asset.
The amount of financial wealth almost caught up during the dot-com boom of the 1990s. But the dot-com bust corrected that. A long rally in stocks began in 2009, at the nadir of the Great Recession, and stock wealth surpassed real-estate wealth for the first time in 2021. Today, Americans hold $55.1 trillion in stocks, compared with $48.7 trillion worth of homes and other properties, according to Federal Reserve data.
[What the bond market wants you to know]
An important statistical note: That stock-market wealth doesn’t include retirement plans such as IRAs and 401(k) plans or stocks held by traditional pension plans. It’s just the amount people hold in individual shares, mutual funds and exchange-traded funds at brokerage firms. Adding stocks held in retirement plans pushes the amount of financial wealth substantially higher.
The case for stocks is even more stark when looking at appreciation. Since 1990, the median sales price of a home in the United States has risen from $123,900 to $410,700, according to Census Dept. data. That’s a nifty 231% gain.
But stocks have vastly outperformed that. The S&P 500 stock index has risen from 334 at the beginning of 1990 to 7,600 in 2026. That’s a 2,178% gain since the beginning of 1990, or 9.4 times the return on real estate. And that does not include reinvested dividends.