Why You Should Not Buy a House in 2025, According to Graham Stephan

If you’re thinking about buying a house as an investment, money expert and YouTube personality Graham Stephan said you may want to reconsider. In a recent YouTube video, he laid out why real estate may no longer be the wealth-building tool it once was — and why the stock market could be a better bet in today’s economy.

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Here’s why Stephan believes you should not buy property as an investment in 2025.

Not every property is a good investment — a lot has to do with factors that may not be in your control.

“For most people, this is going to be completely dependent on when and where you bought your home,” Stephan said. “You could either make a ton of money, or you’re going to be completely f—–.”

As he noted, real estate success is highly variable and not guaranteed.

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Stephan’s own real estate wins came from the time period between 2012 and 2016, when prices were low and mortgage rates were historically favorable.

“The first property I purchased back in 2012 was a bank-owned foreclosure in San Bernardino County, [California], for $59,500,” he said. “I then spent another $12,000 fixing it up, and it’s currently worth about $400,000.”

Between that property and the three others he bought and sold from 2012 and 2016, Stephan made a 280% return on his investment and earned $150,000 in rental income over five years. But he cautioned that those kinds of returns are much harder to come by today.

Even in high-demand areas like Los Angeles County, Stephan said appreciation has slowed. His three current investment properties have increased in value by just 33%, 16% and 20%, respectively, since pre-pandemic levels — far less than expected.

Meanwhile, the costs of owning property have surged. Stephan said that his home insurance rates have increased by 35% to 40%, his property taxes have increased by 15%, and the cost of labor and materials to maintain his properties has increased by 50% to 100%.

“If I were to buy any of these properties today, I would be losing a substantial amount of money,” Stephan said.

He credits his profitability to locking in low mortgage rates and low down payments — advantages most buyers won’t have in 2025.

While the stock market has been volatile, it has still outpaced real estate in terms of returns.

“Nationally, home prices have risen 47% since the start of the pandemic, during a time when the stock market has risen 124%,” Stephan said.

Stephan argues that for most investors, index funds are a simpler and more effective way to build wealth.

“Over the last hundred years, the S&P 500 has averaged 10.6% annualized return with dividends reinvested, which is pretty good for basically no work,” he said. “At a compound annual growth rate of 10.6%, after 20 years, your $100,000 is going to be worth $750,000 with dividends reinvested.”

In contrast, real estate requires active management, from keeping tenants to handling repairs and maintenance.

Once you account for vacancies, non-paying tenants, large repairs and renovations, “leverage for real estate is pretty much the exact same return you would have made in the stock market,” Stephan said, “except with a lot more work.”

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