With all the ups and downs in the economy lately, the stock market’s been a bit of a rollercoaster. If you’ve checked your 401(k) or investments recently, you’ve probably felt that sinking feeling in your stomach. One day everything looks great, and the next—it’s not. It’s totally normal to feel a little uneasy about your finances right now.
But here’s something important to keep in mind if you own a home. According to Investopedia...
“Traditionally, stocks have been far more volatile than real estate. That's not to say that real estate prices aren't ever volatile—the years around the 2007 to 2008 financial crisis are just one memorable example—but stocks are more prone to large value swings.”
Unlike your stocks or 401(k), which can swing up and down pretty quickly, home values tend to be a lot more stable.
A Drop in the Stock Market Doesn’t Mean a Crash in Home Prices
Check out the graph below—it shows how home prices (the blue bars) held up during past stock market ups and downs (the orange bars):
Even when the stock market takes a bigger hit, that doesn’t always mean home prices follow suit.
Big drops in home prices—like what happened in 2008—are actually pretty rare. But of course, that one sticks in everyone’s mind. The crash back then was driven by things like risky lending, subprime mortgages, and way too many homes on the market. That’s not the case today, which is why the situation now is so different.
In a lot of cases—both before and after 2008—home values actually went up even when the stock market was down. It just goes to show that real estate tends to be a more stable investment overall.
This graph really puts things into perspective—the orange line shows how stock prices can swing wildly, sometimes over 30% in a single year. Meanwhile, home prices (the blue line) move at a much steadier pace. Take a look below:
Basically, stocks can be all over the place—you might be way up one day and way down the next. Real estate doesn’t usually work like that. It tends to move more gradually without those big swings.
That’s why real estate often feels like a safer, more stable bet compared to the stock market.
So, if you’re feeling uneasy after all the recent ups and downs in your stock portfolio, don’t worry—your home probably won’t be as volatile.
And that’s why owning a home is often seen as a smart long-term investment. Even if things feel a little uncertain right now, homeowners usually come out ahead in the end.
Bottom Line
A lot of people are feeling uneasy about their finances right now, but there’s one thing you can feel good about—your investment in real estate, something that’s proven to stand the test of time.
