In the U.S., we generally consider homes a bedrock investment. They’re a key anchor of many Americans' financial portfolios - and, increasingly, their retirement plans. But is that wise? Today Unison Investment Management published a groundbreaking Home Volatility Index (read the executive summary and full white paper), showing that a single home is actually a pretty risky asset - as volatile in value as a stock market index. And homeowner portfolios have exposure to the risk of residential real estate far beyond what’s optimum - due to the combination of low interest rates and very low- downpayment mortgages.

The index shows that the long run average annualized volatility of home price appreciation has been approximately 15% per year since 2000 - one percentage point higher than equity stock indices.* Home volatility spiked to more than 35% per year in the heat of the 2008 financial crisis, suggesting that, like equities and fixed-income securities, financial risk of residential real estate is amplified during a financial crisis.

New home buyers are particularly vulnerable to this risk, the index shows, because they often cash out their entire liquid portfolios to make a down payment.

Does this mean you shouldn’t buy a house - or should sell the one you own? No, absolutely not. At Unison, we’re big believers in the American Dream.

It does mean that when you’re thinking about buying and owning a home as part of your financial portfolio, you should be aware of the risk of having your wealth over-concentrated in a single asset. And a home is not just an asset - it’s where you live with your family. And it shouldn’t be where you take excessive risk.

That’s why we think home co-investment is the new normal.

Unison connects aspiring homebuyers and existing homeowners with institutional investors who offer debt-free access to cash for the chance to share in a home’s appreciation. Our HomeBuyer program. provides cash to our partners – you – to supplement a down payment on a new home. Our HomeOwner program allows homeowners to unlock equity in their home to pay off debt, remodel or fund a major purchase. Both programs give you a steady partner, and reduce the amount of capital you have tied up in your home.

This isn’t a loan, which means there are no monthly payments and no interest. If the home depreciates, then Unison shares in the loss.

Owning a home is still a smart investment. But putting all your eggs in one basket isn’t a smart strategy.