Many think we're living in an uncertain economy. Some present concerning scenarios. Americans are less optimistic than ever. And new jobs are scarce.
Yet, last week, the Dow Jones Industrial Average broke through the 55,000 barrier for the first time.
Are there things the big investors know that we don't? And what does all this mean for those wishing to buy a home, whether for themselves or as an investment property?
Stock Prices Don't Always Represent the Full Economy
Last Friday, The New York Times published an article under the headline, "Crises Everywhere, but the Markets Don’t Seem to Mind." It explained why stock market indices are poor indicators of the state of the economy.
"This dissonance between real-world distress and glorious financial wealth is a permanent feature of the markets, not a bug," said The Times. "Markets have prospered through civil unrest, pandemic, glaring racial inequality, recession, severe unemployment, tattered alliances, tariff conflicts and outright war. To set off a boom, all that’s needed are enough people believing they can make money."
The problem with this is that, very suddenly, tides can change, and the number of people who believe they can't make money can grow. And that can lead to market crashes and recessions, as we saw most recently in 2007-08.
Are We Stuck in a "Doom Loop?"
For its article, The Times interviewed Professor Eswar S. Prasad, an economist at Cornell and the Brookings Institution, and author of a new book, "The Doom Loop." On the book's website, it says, "Prasad argues that we are caught in a destructive feedback loop between economics, domestic politics, and geopolitics."
The site says the book "argues that the very forces that we long believed could stabilize the world order are fueling its destabilization." According to Prasad, increased globalization has enhanced economic inequality, political backlash, and trade wars.
The book goes on to claim that institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) have simply not adapted to the social, economic, and technological realities of the 21st Century, further compounding the issues.
Confusing Economic Data Reports
Current economic data doesn't seem to provide a reliable guide to economic performance. For example, last week, the Bureau of Labor Statistics (BLS) unveiled January's tally of new jobs.
"Total nonfarm payroll employment rose by 130,000" that month, said the BLS, which was great news. However, on the same day, the Bureau released revisions showing growth of only 181,000 jobs for the whole of 2025, down from 1.46 million in 2024. How does one make sense of that?
Also last week, the BLS showed year-over-year growth in the consumer price index (CPI) at 2.4%, close to the Federal Reserve's target of 2% annually. Again, that's excellent news.
However, Comerica Bank warned before the CPI's publication: "CPI inflation likely slowed in January, but the improvement should be read with a grain of salt: The 2025 government shutdown interrupted collection of some price surveys, making CPI look unrealistically low now. The CPI will likely move a notch higher in April when the government’s statisticians fill the gaps in the data."
Other data present similarly confusing contradictions. But employment and inflation reports are the two categories that influence markets most. And they feel increasingly random.
Accurate Economic Forecasting Is Difficult
"Economists have predicted 11 of the last 5 recessions," runs the old joke. And, like all good jokes, it contains a kernel of truth.
The late Harvard economist John Kenneth Galbraith said the same thing even better. "The only function of economic forecasting is to make astrology look respectable."
We're not in the business of predicting either recessions or stock market collapses. But there are clearly worrying signs about the economy's prospects. So, should cautious stock market investors at some point move some or all their money into more stable havens? And, if so, is real estate a good place for their assets?
Is Real Estate a Haven for Stock Investors?
Only individual investors can decide when the moment is right to revise their portfolios. But real estate might provide some form of haven.
The Federal Reserve Bank of St. Louis has tracked the median sales price of houses sold in the United States since 1960. And its chart shows an impressive line of stable price growth, certainly compared with stock market indices.
Yes, home prices have dipped several times around recessionary periods. But price falls have tended to be brief and recoveries quick.
The longest and sharpest example happened between the first quarter of 2007 (median sale price $257,400) and the first quarter of 2009 ($208,400). However, prices recovered fully by the first quarter of 2013, and by the second quarter of 2025, that median sales price stood at $410,800. And that figure is expected to rise in 2026.
Of course, there are plenty of other forms of safe-haven investments, including bonds and gold. And investors should weigh the pros and cons of each.
However, with a chronic shortage of inventory, putting money into real estate (whether by upgrading to a better principal residence or buying investment properties for their passive income and asset appreciation) might well make their short lists.
