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Homeownership has been the best way to build wealth (or equity) historically.

Dr Perry has shown the Housing Affordability Index (HAI) before. It shows, housing affordability fell from 1973-82 (which coincides with a bust phase in a long-wave business cycle). The HAI fell from roughly 150 in 1973 to 65 in 1982 (i.e. homeownership became less affordable). HAI peaked at 180 in Spring '09, and remains at an elevated level (165 in Sep '09).

Of course, the homebuilding boom, generally from 1995-06, created newer, bigger, and better houses.

There's been a lot of coverage about the homebuilding boom taking place in four states, i.e. California, Arizona, Nevada, and Florida. However, Colorado had a huge homebuilding boom, at least in relative size.

In the '80s, there were few housing tracts around the Denver Tech Center (about 20 miles south of Denver). However, by 2000, the area was built-up with houses, high-tech buildings, and impressive malls, to the mountains in the west and to Castle Rock in the south. The houses were generally large and would be viewed as upper-middle class.

Also, Denver itself saw three new pro sports stadiums (the Pepsi Center, Invesco Field at Mile High, and Coors Field), a light rail system, the renovation of lower downtown, the first new international airport built in the U.S. in many years, an impressive central library (which held the G-8 meeting one year), a convention center, sidewalks and streets redone, etc.

Moreover, many housing tracts were built in Boulder county. I visited a former classmate in 2004. He bought a new house a few years before for about $170,000 and then refinanced it at a lower rate. He said it was worth over $250,000. It was a three bedroom two story with two baths. It also had a large den, living room, dining room, large kitchen, which the back door led to a very large backyard, and a large basement, along with a big hallway at the front door. There was plenty of room for a family of four, and could easily be converted into a five or six bedroom. There were several new housing tracts in the area, which was mostly a patchwork of small farms. He had to drive two miles to the nearest store, and then there were many stores and malls. He lived less than 30 minutes away from the university. It was a great deal (reflecting a high living standard), particularly compared to many of the older, smaller, and much more expensive houses in California.