Investment is not the same as speculation.
Even without guaranteed appreciation in value people will buy homes because they have an asset compared to alternatives like renting. When renting you’re guaranteed a loss on rent paid.
If money was the only goal, renting something extremely inexpensive and investing would give me a better financial return.
Where I live buying is much cheaper than renting and even if my home is worth 25% less than I paid for it by the time it’s paid off I can come out ahead because I still have an asset worth let’s say $100k and I’ve spent less money than I would renting. That’s without factoring in the other reasons people buy homes.