But calculating the actual return on a Long Island house is more complex than this. A typical family would have used a mortgage, putting up much less money at first than the house’s price. The family would have gotten tax deductions on the mortgage interest, too. But it also would have paid property taxes and made renovations to the house. What’s more, the family would have lived in the house, saving on any rent they would have paid to live somewhere else.

Including all these factors, Thomas Z. Lys, an accounting professor at the Kellogg School of Management at Northwestern University, calculates that a $100,000 home bought in 1980 gave an average annual increase of 17.8 percent.

Out of this 17.8 percent, 5.1 percentage points comes from sheer price appreciation, over and above the value of living in the house. That is much lower than many people imagine — and far lower than the stock market’s return. But many homeowners seem to forget how much they have spent on repairs and renovations over the years.

None of this means a house is a bad investment. It’s just that most of the value of a house comes from using it. In this way, it is more a consumer product than it is an investment. Out of 17.8 percent annual return, 12.7 percentage points come from this value of using the house. Without owning the house, a family would have to pay to live somewhere else. When they sell the house, they will also have to pay to live somewhere else.

Over this same time span, the Standard and Poor’s 500 index has had an average annual return of 12.1 percent.

Taking inflation into account would significant reduce all of these returns. During this period, inflation rose at an annual rate of 3.65 percent. In fact, people often confuse normal inflation — the same force that makes everything from milk to cars more expensive — with an actual increase in house value.

If you’re interested in how home prices have fared in your area over the past 25 years as compared to the Standard and Poor’s 500 index, go here to download this interactive spreadsheet. You will need a spreadsheet program like Excel to view it.