>90% of Americans prefer their primary residence as an investment over the stock market. People are likely to move funds from savings and the stock market into their homes, as they believe this to be the best strategy.

The way the housing market is structured, it is a vastly superior investment for most Americans. Housing is the only asset where every American can be highly leveraged with a fixed downside. As a house buyer you need only 10-20% down and can mortgage the rest. So if the house price goes up 10%, your return on principle is more than 50%. In California and some other states, first mortgages are non-recourse -- if there is a short sale the homeowner is not personally liable for the difference between the sale price and what is owed on the loan -- this is not true if you buy equities on margin. For these reasons, historically the returns for Americans of modest means has been astronomically larger than the returns on equities. The "all cash" phenomenon is partly investors realizing there are excess returns in this market.