What If You Bought Your Home in 1995?

According to ResiClub's analysis of the Freddie Mac House Price Index, U.S. home prices surged by an impressive 300% from March 1995 to March 2025. Despite market fluctuations over the past three decades, homeowners experienced substantial gains in home equity, highlighting the enduring value of real estate as a wealth-building tool. Some may argue that stocks offer superior returns, noting that the S&P 500 Index rose by roughly 926% over the same period, but consider this:

• Leverage: Home price gains can yield far higher returns on a buyer’s down payment due to mortgage leverage.

• Opportunity Cost: Choosing to skip homeownership often means paying rent and underinvesting in the stock market, shifting how real returns compare.

• Utility Value: Homes also provide shelter, stability, and access to community benefits like schools. Unlike stocks, owning a home often acts as a form of forced savings, helping build wealth in ways that renting typically does not.

Ralph’s Take

The fundamentals are unchanged: homeownership is both a place to live and a powerful financial asset. For many, it remains one of the most attainable and dependable ways to build long-term financial stability. Amid the noise of short-term market headlines, the experience of the 1995 homebuyer is a reminder of the value in taking the long view. Housing isn’t just about monthly trends — it’s about the wealth it can build over decades.