Stocks Outpaced Home Prices as Sellers Offered Buyers More Concessions

U.S. home prices rose 87% over the decade through December 2025, well behind the S&P 500’s 235% gain. Economists Ray Fisman and Michael Luca say the gap should prompt Americans to rethink the trade-offs between renting and buying.

The comparison excludes dividends, which would have lifted stock returns further. In 2026, nationwide home prices were up 1.5%, while the S&P 500 had gained 13%, according to figures cited in the article.

Fisman and Luca said borrowing can magnify gains because homeowners often put down only part of a home’s price. But falling prices can also hit hard, since a home is a single, illiquid investment. They argue that choosing where to live and where to invest are separate decisions.

A home also provides a place to live, and ownership can bring benefits such as the freedom to remodel. Renters, meanwhile, may face limited supply or the risk of being forced to move.

For buyers, sellers are increasingly offering concessions. Redfin said sellers made concessions in 44.7% of home sales in August, the highest share for that month since at least 2020. Offers include mortgage rate buy-downs, repairs, appliances and concessions worth $10,000 to $20,000.