Homes Priced in the S&P 500
How many units of the S&P 500 index it takes to buy the average American home. The line has fallen for four decades because stocks outran houses. The interesting part is why regular people built wealth in houses anyway.
| Year | Home in S&P 500 units | Average home price | S&P 500 level |
|---|---|---|---|
| 1970 | 320 | $26,650 | 83.22 |
| 1971 | 286 | $28,100 | 98.28 |
| 1972 | 275 | $30,075 | 109.21 |
| 1973 | 327 | $35,100 | 107.42 |
| 1974 | 469 | $38,725 | 82.55 |
| 1975 | 494 | $42,525 | 86.16 |
| 1976 | 471 | $48,050 | 102.02 |
| 1977 | 553 | $54,350 | 98.21 |
| 1978 | 653 | $62,700 | 96.02 |
| 1979 | 698 | $71,900 | 103.02 |
| 1980 | 643 | $76,375 | 118.78 |
| 1981 | 650 | $83,175 | 128.04 |
| 1982 | 700 | $83,850 | 119.73 |
| 1983 | 560 | $89,775 | 160.42 |
| 1984 | 608 | $97,550 | 160.47 |
| 1985 | 540 | $100,825 | 186.85 |
| 1986 | 474 | $112,075 | 236.36 |
| 1987 | 445 | $127,575 | 286.84 |
| 1988 | 522 | $138,650 | 265.78 |
| 1989 | 459 | $148,125 | 322.83 |
| 1990 | 446 | $149,075 | 334.59 |
| 1991 | 392 | $147,275 | 376.18 |
| 1992 | 348 | $144,675 | 415.74 |
| 1993 | 327 | $147,475 | 451.41 |
| 1994 | 335 | $154,175 | 460.33 |
| 1995 | 291 | $157,750 | 541.64 |
| 1996 | 247 | $165,525 | 670.83 |
| 1997 | 200 | $174,875 | 872.67 |
| 1998 | 167 | $181,150 | 1,084.31 |
| 1999 | 147 | $194,675 | 1,326.06 |
| 2000 | 144 | $205,375 | 1,427.01 |
| 2001 | 177 | $211,050 | 1,192.08 |
| 2002 | 228 | $226,700 | 995.63 |
| 2003 | 254 | $244,550 | 963.69 |
| 2004 | 241 | $272,125 | 1,130.55 |
| 2005 | 241 | $291,275 | 1,207.06 |
| 2006 | 232 | $303,900 | 1,310.67 |
| 2007 | 210 | $309,800 | 1,476.63 |
| 2008 | 237 | $289,075 | 1,220.89 |
| 2009 | 285 | $269,350 | 946.74 |
| 2010 | 239 | $272,025 | 1,139.31 |
| 2011 | 209 | $264,600 | 1,268.89 |
| 2012 | 209 | $288,225 | 1,379.56 |
| 2013 | 196 | $321,650 | 1,642.51 |
| 2014 | 179 | $345,450 | 1,930.67 |
| 2015 | 170 | $350,450 | 2,061.20 |
| 2016 | 172 | $359,650 | 2,091.84 |
| 2017 | 156 | $381,150 | 2,448.22 |
| 2018 | 139 | $382,475 | 2,744.68 |
| 2019 | 130 | $379,875 | 2,912.50 |
| 2020 | 121 | $387,900 | 3,218.50 |
| 2021 | 106 | $452,675 | 4,266.80 |
| 2022 | 126 | $516,425 | 4,100.70 |
| 2023 | 119 | $507,125 | 4,280.78 |
| 2024 | 94 | $507,875 | 5,428.10 |
| 2025 | 84 | $519,700 | 6,210.97 |
| 2026 | 68 | $514,600 | 7,570.03 |
In 1982, with inflation raging and magazine covers declaring the death of equities, the average home cost 700 units of the index, the all-time high. Today it costs 68, the all-time low, less than half the prior record set at the dot-com peak. Read it honestly: houses did not get cheap in dollars; stocks got expensive, relentlessly, for four decades. Unlevered and before dividends, the index turned 1 dollar into 91 since 1970; the average house turned 1 dollar into about 19.
What this means for you
The part the chart cannot show: nobody buys a house unlevered.
$25,000 of your cash controls the full $500,000 asset. That is 20-to-1 leverage.
At housing's 5.4% historical average appreciation, the full $500K grows, not your $25K. Roughly a 108% gain on your cash, before costs.
$25,000 in the index at a 10% total-return year. Strong, real, and one tenth the equity move, because there is no leverage.
Borrowing 20-to-1 against stocks triggers forced liquidation on any dip. A 30-year fixed cannot be called for a price decline. Make the payment and nobody can make you sell.
Stocks won the unlevered race, and it was not close. But no ordinary person can hold 20-to-1 leverage on the S&P 500 through a bad month, let alone thirty years. The 30-year fixed-rate mortgage is the only instrument that lets a regular household apply that kind of leverage to an appreciating asset with a locked cost, no forced sales, and a place to live inside the position. That, not superior price growth, is why housing built the American middle class.
Part 2: the same $25,000, two different futures.
Take the down payment from the panel above and run both paths forward for 30 years using each asset's own historical average: the house at 5.4% appreciation with a 30-year fixed at today's 6.43% rate, the index at a 10% total return. Same starting cash.
| Year | Home equity | Home value | Loan balance | S&P path |
|---|---|---|---|---|
| 0 | $25,000 | $500,000 | $475,000 | $25,000 |
| 1 | $57,380 | $527,000 | $469,620 | $27,500 |
| 2 | $91,575 | $555,458 | $463,883 | $30,250 |
| 3 | $127,686 | $585,453 | $457,767 | $33,275 |
| 4 | $165,821 | $617,067 | $451,246 | $36,603 |
| 5 | $206,096 | $650,389 | $444,292 | $40,263 |
| 6 | $248,631 | $685,510 | $436,879 | $44,289 |
| 7 | $293,554 | $722,527 | $428,974 | $48,718 |
| 8 | $340,998 | $761,544 | $420,545 | $53,590 |
| 9 | $391,108 | $802,667 | $411,559 | $58,949 |
| 10 | $444,034 | $846,011 | $401,977 | $64,844 |
| 11 | $499,935 | $891,696 | $391,761 | $71,328 |
| 12 | $558,980 | $939,847 | $380,868 | $78,461 |
| 13 | $621,346 | $990,599 | $369,253 | $86,307 |
| 14 | $687,222 | $1,044,091 | $356,870 | $94,937 |
| 15 | $756,807 | $1,100,472 | $343,666 | $104,431 |
| 16 | $830,310 | $1,159,898 | $329,588 | $114,874 |
| 17 | $907,955 | $1,222,532 | $314,577 | $126,362 |
| 18 | $989,977 | $1,288,549 | $298,572 | $138,998 |
| 19 | $1,076,623 | $1,358,131 | $281,507 | $152,898 |
| 20 | $1,168,157 | $1,431,470 | $263,312 | $168,187 |
| 21 | $1,264,857 | $1,508,769 | $243,912 | $185,006 |
| 22 | $1,367,015 | $1,590,243 | $223,228 | $203,507 |
| 23 | $1,474,943 | $1,676,116 | $201,173 | $223,858 |
| 24 | $1,588,969 | $1,766,626 | $177,657 | $246,243 |
| 25 | $1,709,440 | $1,862,024 | $152,584 | $270,868 |
| 26 | $1,836,722 | $1,962,573 | $125,851 | $297,954 |
| 27 | $1,971,205 | $2,068,552 | $97,347 | $327,750 |
| 28 | $2,113,299 | $2,180,254 | $66,955 | $360,525 |
| 29 | $2,263,437 | $2,297,988 | $34,551 | $396,577 |
| 30 | $2,422,079 | $2,422,079 | $0 | $436,235 |
By year 10 the homeowner's equity is about $444,000 against $65,000 in the index, and by year 30 roughly $2.42 million against $436,000, about 5.6 times more wealth from identical starting dollars. Two engines drive the equity line: appreciation working on the full $500,000 rather than on $25,000, and the loan balance amortizing to zero. The leverage does the heavy lifting, not the paydown: counting appreciation alone and ignoring every principal payment, the house path still reaches about $1.95 million.
The same 20-to-1 math works in reverse: a 5% price decline wipes out a 5% down payment on paper, and 2008 to 2011 is sitting right there on this chart. The protection is not that losses cannot happen. It is that you cannot be forced to realize them. The discipline that makes the leverage safe is a payment you can comfortably hold through a bad market, which is a structuring question, not a timing question.
The house does a job the index fund cannot: it replaces rent, the one cost that has never gone down. The index does a job the house cannot: liquidity and diversification. Most people should aim to own both. The mistake this chart argues against is treating the down payment and the brokerage account as rivals for the same dollar without noticing the leverage asymmetry between them.
Financial advisors, this is the chart for the client who says the market beats real estate so they will keep renting and investing. They are right on the first half and wrong on the conclusion, and the 20-to-1 panel above is why. Clients also do not need to liquidate the portfolio to buy: down payment sourcing from securities, reserve requirements, and gift funds are financing questions, and those are handled from here.
How to read this honestly. The S&P line in the ratio chart is price only; with dividends reinvested, stocks won by even more. Homes also carry taxes, insurance, and maintenance that an index fund does not, and homeowners collect an offsetting benefit by not paying rent. The Part 2 projection is an illustration of leverage mechanics, not a complete rent-versus-buy analysis: it isolates the same $25,000 and ignores the monthly flows on both sides. The homeowner makes mortgage payments (which fund the principal paydown shown) plus taxes, insurance, mortgage insurance, and upkeep; the investor pays rent the whole time, and rent has never gone down. Steady average growth every year is a simplification no real 30 years will match; both assets have losing years, and leverage magnifies the house's losing years exactly as it magnifies the winners. Every figure is a national average and a historical one; past performance does not predict future results. Education, not investment advice.
Related chart: The Rent Line.
Sources: Home prices are the Census and HUD average sales price of houses sold (ASPUS), annual averages, with 2026 using the Q1 2026 reading ($514,600). S&P 500 is annual averages of monthly average closing prices, Standard and Poor's via Robert Shiller's dataset (multpl.com); the 2026 point is the spot level as of July 13, 2026 (7,570), price only, excludes dividends. Ratio equals home price divided by index level. Part 2: $500,000 purchase, $25,000 down, $475,000 30-year fixed at 6.43% (Freddie Mac average as of July 9, 2026, monthly P&I about $2,980), home value compounding at 5.4% annually, equity equal to home value minus loan balance; index path compounds $25,000 at a 10% annual total return with no additional contributions. Both growth rates are long-run historical averages applied smoothly and are not predictions. Linear scale from zero.