Burry calculated that the long-term after-tax return on residential real estate over a 50-year horizon sits at approximately 4.5% once maintenance costs are factored in. This performance mirrors a solid bond, yet it lags behind the S&P 500, which has surged more than 400% since 2001. During that same period, the median US home sale price rose by 140%, climbing from $170,000 to $403,000.
Michael Burry: Why your home is a poor investment
Michael Burry, the investor famously depicted in "The Big Short," argues that residential real estate is a mediocre financial vehicle. While home prices have climbed significantly over the last two decades, Burry contends that the long-term after-tax returns fail to outpace simpler alternatives like the S&P 500.
Beyond the math, Burry notes that homes are becoming larger, which often diminishes the relative value of older properties unless they occupy prime land. He suggests the primary value of a home lies in its utility—the lifestyle benefits and the stability of a place to live—rather than its potential as a wealth-building asset. This perspective aligns with other market commentators like Robert Kiyosaki, who classifies a primary residence as a liability due to the ongoing costs of taxes, insurance, and maintenance. While figures like Warren Buffett and Jeremy Siegel have long touted the historical superiority of stocks, Burry’s assessment serves as a blunt reminder that for the average owner, a house functions better as a home than a portfolio booster.
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