As far as I understand it, it's all comes down to your ROI - compute how much your down payment would be if you invested it in the stock market, and compare that to how much your house would be worth in the same amount of time. For an $800,000 home (SF Bay Area), I would need a 20% down payment of $160,000. If I instead invested the $160,000 in the stock market and get a 10% return (historical average returns), I'd have $3.173MM in 30 years (again, assumes 10% compounding interest). I would have made $3MM. If I instead put the money into a house, I would own the house in 30 years. Assuming the $800,000 house appreciates at 3.5% annually (a number I read in a local publications), the house would be worth $2.28MM in 30 years. After the loan was paid off, assuming I made regular payments I would have paid much much more than $800,000 over the 30 years. But let's say I did end up only spending $800,000, best case I would have made $1.482MM (2.28-.800=1.482). But realistically my net return would be much less than $1.482 due to interest on the mortgage....and the cost for home maintenance which I didn't even include! Which get's me to my real question 1. Did I make an incorrect assumption in how to go about comparing the two outcomes? 2. If I didn't, I'm having a hard time understanding why I should put my $160,000 into a real estate investment which has a mortgage and home maintenance costs (one article I read said assume 1% of your home value per year, so $8,000/year for this example) instead of just putting it in the stock market. Yes I realize that 10% stock market return is not guaranteed - it's just the historical average. Yes I realize that the home appreciation value I used (3.5%) could end up being more (or less) and therefore significantly impacts the outcome. But If I were to put my money somewhere, it just seems smarter to bet on the stock market instead of real estate. Yet people are always investing in real estate. What am I missing?! Can anyone recommend an online calculator that can help me with this comparison?