Which Is the Better Investment Right Now, According to Financial Experts?
Since the war with Iran began last week, the stock market has been seesawing, to put it lightly.
Surging gas prices combined with already high tensions concerning inflation have the market resting on a knife’s edge.
U.S. crude oil briefly hit $120 a barrel late Sunday, settling Monday afternoon at $95, before dropping to $86 by 4 p.m. ET after President Donald Trump said the “war is very complete.” The Dow closed up 239 points (0.5%), recovering from an 886-point earlier drop. The S&P 500 and Nasdaq Composite also rose, gaining 0.83% and 1.38% respectively, after early losses, according to CNN.
Still, JPMorgan trading desk analysts warned clients Monday that a prolonged war with Iran could send the S&P 500 into a 10% plunge.
Additionally, defiant comments from Iran’s military cast doubt over the prospects of a swift resolution, thus leaving the market vulnerable to more turmoil.
For investors looking to put their money to the best use, the question becomes whether now is the right time to buy real estate or the stock market is still the place to go.
Experts agree that investing in real estate is a solid bet, especially if you’re willing to commit for the long term.
“Put simply: You can’t live in a stock,” says Realtor.com® senior economist Joel Berner.
“There is so much uncertainty in both the stock and housing markets right now, stemming primarily from the conflict in Iran which has sent stocks plummeting and ended the descent of mortgage rates. You could easily lose money in either investment right now, and you could easily be buying the dip and make a handsome profit by investing in either right now. The main case for real estate is that it has practical value outside of its potential financial returns.”
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.
Let’s put this in practical turns: Let’s say you bought a home in March 2020 for the median home price of $319,000. By March 2025, the median home price rose to $424,900, marking a 33% increase in value. And appreciation is forecasted to rise again in 2026, but by 2.2%, according to Realtor.com economists.
“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 is that even before 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 last five years individually, you can see the trend of “stagnant, stubbornly high home prices,” as Jones puts it, when looking at the median home price in the U.S.—thus a rate of return falling much shorter than what was once the average.
Because of this, buying property as a short-term 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.”
Real estate or the stock market? Financial experts weigh in on which is the better investment right now. (Realtor.com)
The collective advice from most financial advisers right now is very much the same as real estate: Sit tight, because the investments will come back.
“Market fluctuations are normal,” explains Melissa Murphy Pavone, certified financial planner and founder of Mindful Financial Partners. “Staying invested is key. History shows that the worst days in the market are often followed by some of the best. Trying to time the market usually does more harm than good.”
Case in point: After surging 26.3% in 2023 and 25.0% in 2024, the S&P 500 index brought in a lower 17.9% in 2025. But despite the dip, that’s still three consecutive years of high performance and, before the start of the Iran war, Goldman Sachs forecasted the index to rally 12% in the coming year.
“It’s really hard to predict the future,” says Cynthia Meyer, a financial planner at Real Life Planning in Gladstone, NJ. “If you take the long view and you’re really well diversified across investments, so you don’t own one stock, you own hundreds of stocks … some of those cylinders are always going to be firing.”
Moreover, if you’re in the position to buy, now might be the best time to jump into investing. Never forget Warren Buffett’s famous quote from his 2008 op-ed in the New York Times, published at the peak of the Great Recession: “In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”
So, which is better right now to buy: real estate or stocks? While both will likely provide a return in the long run, you stand a better chance of increasing your investment with real estate, especially if the country does move into a recession.
“If the economy moves toward a recession, we would expect to see higher unemployment, which would lead to falling demand and perhaps more homes for sale,” Jones explains.
“Climbing inventory met with falling demand would put downward pressure on home prices. A recession usually leads to lower mortgage rates as well. Falling prices and low mortgage rates could create an investor-friendly housing market, but the economic conditions that created that sort of environment (low growth, high unemployment) would undermine the opportunity for many.”
