Buying a house isn't just about expected return. It's also about hedging. You need to live somewhere, so you have an implicit liability of a stream of rental costs. The most natural hedge for that is a house. If expected future rental costs go up, your house value goes up. If they go down, your house value goes down. Overall, your risk, in present value terms, is reduced.

Of course this doesn't work exactly and you can nitpick this, but I think people should at least look at housing assets as more than "is it going to go up?", and more about long-term risk reduction. (And, just to be clear, this doesn't mean that you should lever up beyond reason to buy a house.)