In the US specifically, home ownership has been the primary way that many people have "built" wealth in the 20th and 21st centuries. It also gives you the ability to participate as a citizen in many more ways than a renter, as you have influence over local public policy in many more concrete ways.

Lastly, it's hard to overstate to a non-American how much owning a home is seen as a central part of American identity. It's almost like part of "growing up" in a way. I say this in a tone of trying to explain haha, please don't perceive this as being pedantic.

Interesting, calling an investment strategy "FOMO".

More likely, people flush with cash see inflation eroding it, think the stock market is already too high.

Lack of understanding of markets.