100 Years Housing Returns Less Than One Year Return From Stocks

December 2, 2012 1:32 pm

This is from Nate Silver’s book ‘The Signal and the Noise’ – 10,000 dollars invested in an American Home in 1896 would be worth 10,600 dollars in 1996 after adjusting for inflation. In other words, the rate of return had been less in a century, than the stock market typically returns in a single year (numbers are based on an index developed by Robert Schiller and Karl Case)

If people had taken note of this fact, the bubble in the early 2000s could have been avoided. Okay, if (your favorite reason) the bubble could have been avoided. But this data point on home investment returns definitely came as a surprise to us.

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