Rates in US banks are 1.7%+, and there is considerably more risk involved in renting a residence rather than having cash deposited in an FDIC insured bank account requiring a considerable premium. Also, if the home investment is on the time horizon of 5+ years, I can't see many homeowners outside of hot real estate markets (which is a gamble) beating a total market index fund, if you factor in labor, time, tenancy and home maintenance risk, and the fact that the US government is going to bail out the public equity markets no matter what.