S&P 500 Significantly Outperforms Housing Over 50 Years
Since 1975, the S&P 500 delivered an average annual total return of 12.2%, more than double the 5.1% gain in US home prices.
SPX
The S&P 500 has substantially outpaced US residential real estate as a long-term wealth builder, according to data compiled by The Kobeissi Letter.
Key comparisons since 1975:
- Total return (with dividends reinvested): S&P 500 +12.2% per year vs. home prices +5.1%
- Price return only: S&P 500 +9.3% per year, still well ahead of housing
- Inflation-adjusted total return: S&P 500 +8.3% vs. housing +1.4%
- Real price return: S&P 500 +5.4% annually
The S&P 500's real total return has been nearly six times higher than that of home prices over the past five decades. Even stripping out dividends and inflation, equities have grown wealth considerably faster than property.
The data highlights the power of compound returns and reinvested dividends in equity markets, leaving housing returns—often perceived as a safe store of value—far behind on a real basis.
Source: The Kobeissi Letter