Stock Market Outperforms US Housing Returns as Mortgage Rates Remain High

Industry Pulse News Desk · 2026-09-27

S&P 500 gains have outstripped decade-long home price increases as 7% mortgage rates continue to restrain real estate growth.

U.S. stock market returns have significantly outpaced housing gains over the past decade, as mortgage rates above 7% continue to constrain home price growth while equity markets record substantial gains.

From December 2015 to December 2025, the S&P 500 rose 235% excluding dividends, according to market indexes. By comparison, the national Case-Shiller Home Price Index increased 87% over the same ten-year period. Year-to-date data shows national home prices up 1.5%, while equities have advanced 13%.

Higher borrowing costs stemming from Federal Reserve interest rate policy have subdued real estate activity since 2022. The persistent high-rate environment has led a growing number of prospective buyers to rent and allocate capital into stock markets rather than saving for real estate down payments.

Economists note that homeownership combines housing decisions with concentrated financial exposure. While mortgage leverage can magnify initial equity gains during market upturns, it also concentrates financial risk in a single, illiquid asset compared to diversified equity portfolios.

Softening housing demand has broadened seller concessions, which reached 44.7% of home transactions last month—the highest rate for August since at least 2020. Common incentives include mortgage rate buydowns, direct price cuts, and seller-funded repairs to close deals in a buyer-oriented market.