Real Estate vs. Stock Market: Which Is the Better Investment Right Now, According to Financial Experts

President Donald Trump's "reciprocal" tariffs caused the stock markets to plummet—leaving many Americans concerned about the grave impact the measures might have on their own finances and prompting several major institutions to up their risk of a recession from 40% to 60%.

On April 6, four days after the tariffs were announced, CNN reported that the S&P 500 had lost 15% of its value since Trump's inauguration on Jan. 20, and by 12:00 p.m. ET on April 9, stocks had fallen by more than 12%, according to Reuters.

However, the market saw some recovery just hours later when the president instituted a "90-day pause" on the tariffs, lowering them to 10% for all countries except China—whose tariffs he raised to 125%.

The move saw the stock market surge toward its best day in five years, with the Nasdaq composite rising more than 8%, while the Dow Jones Industrial Average and the S&P 500 both gained more than 5%.

Still, the true fallout from the "Liberation Day" tariff announcement is still being calculated, and the continued financial volatility has seen several industry titans warn that America could be at risk of another recession—with some going as far as to claim that it has already happened.

“Most CEOs I talk to would say we are probably in a recession right now,” BlackRock CEO Larry Fink said at an event for the Economic Club of New York on April 7, according to CNBC.

“One CEO specifically said the airline industry is a proverbial bird in a coal mine—canary in the coal mine—and I was told that the canary is sick already,” Fink added.

But what about those in the housing industry? Is there concern that the implications tariffs will have on the housing market will affect investment returns? Or is owning property a better option than putting more money into the stock market? Here’s what experts have to say as of right now. 

The outlook for the real estate market...

While tariffs can cause market uncertainty, historically speaking, investing in real estate is a solid bet, especially if you’re willing to commit for the long term.

It was once believed that a homeowner needed to retain their property for at least five years to make a decent return on their investment. While that number has been bumped up a few years, it’s still widely believed that your home's appreciation will grow with you. 

For example, let’s say you bought a home in March 2020 for the median home price, according to Realtor.com data. You would’ve bought your home for $319,000. In 2025, the median home price rose to $424,900, marking a 33% increase in value. 

“Home prices climbed significantly during the [COVID-19] pandemic as buyer demand outstripped supply,” Hannah Jones, Realtor.com® senior economic research analyst, explains. “Homeowners, especially those who bought pre-pandemic, saw and continue to see significant returns from selling their home.”

The caveat that Jones points out, however, is that even before the tariffs and stock market fluctuations, the returns on property had become immobile.  

“Still-high home prices and elevated mortgage rates mean that it is relatively expensive to finance a home purchase today,” she adds. 

If we look at the past five years individually, you can see the trend of “stagnant, stubbornly high home prices,” as Jones puts it, thus a rate of return falling much shorter than what was once the average. 

• March 2025: $424,900

• March 2024: $424,900

• March 2023: $424,000

• March 2022: $399,450

• March 2021: $352,450

• March 2020: $319,000

Because of this, buying property simply as a mere investment might not be the right move

“Still-high home prices and financing costs mean that buying a home purely as an investment may not be advantageous today,” Jones explains. “Rental prices have also leveled off or fallen across much of the country, which means that today's investors may not be able to cover their monthly costs via rental income.”

Having said that, if you’re a first-time homebuyer or someone looking to lay down roots, buying a home is still a good investment. 

“Real estate holds value beyond simply being an investment vehicle,” Jones adds. “For homeowners who live in the home they own (versus rent it out), having a place to live is valuable apart from the potential return on a home investment. Buying may be the right decision for households who want or need to purchase a new home to live in.”