What a dazzling, dizzying ride it's been. Over the past few years, home values all over the Washington area have shot up, making many people a lot richer than they used to be.

Forget stocks and bonds. Most of the wealth Americans accumulate is in the walls around them -- if they own those walls -- and not just because of the recent carnival of climbing prices.

For decades, owning property has been the steadiest, most reliable way for Americans to improve their bottom lines, economists say. Homeowners have a much higher net worth than renters, Federal Reserve figures show.

"Homeownership has been a very quiet wealth builder that no one realized," said David A. Lereah, chief economist of the National Association of Realtors. "In the 1990s, the stock market was so hot that everyone just thought they could get into stocks and double their money very quickly. We know what's happened there. And all along, housing was quietly building wealth for American households."

Homes are more widely held than stocks -- 68 percent of Americans own homes and only 52 percent own stocks in one way or another, according to the Federal Reserve.

"Housing is much more important to households than stocks," said Mark M. Zandi, chief economist at Economy.com, a consulting firm. "Stocks are concentrated in the top 25 percent of holders. So stocks really only matter for about 25 percent of us."

Nicolas P. Retsinas, director of Harvard University's Joint Center for Housing Studies, says homeownership is the "principal source of wealth creation for low- and moderate-income families in the United States."

A 2001 survey by the National Association of Realtors found that the typical homeowner had equity of $50,000. Households with annual incomes greater than $75,000 had a median of $100,000 in equity; households earning less than $40,000 had a median equity of $40,000.

The equity that Americans have in their homes stood at $7.56 trillion in the third quarter of 2002, according to the Federal Reserve. That's up $2.7 trillion since the third quarter of 2000. Conversely, stock holdings went down $2.29 trillion over the same period.

That period did coincide with the bear market on Wall Street. But over even longer terms, homeownership has been a winner.

Homeowners who want to can tap the built-up equity through refinancing, home-equity loans or home-equity lines of credit.

"Homeowners can use their houses to rearrange their portfolios," said Orawin T. Velz, senior economist at Fannie Mae. "It's a very flexible asset."

The great amount of refinancing in this time of low interest rates has pumped billions of dollars into the economy. The robust housing market has been able to keep the economy from slumping further.

Chris Dugan, 30, used cash obtained through refinancing to rearrange his investment portfolio.

Dugan, a pilot for Atlantic Coast Airlines, used the equity he built up in a property he bought for $109,500 on Maryland's Eastern Shore to buy two investment condos in Oakton, Va. The Eastern Shore property was recently appraised for $160,000, giving him tens of thousands of dollars in equity.

"I've bought a property a year for the past three years," Dugan said. "This year, I'm hoping for an additional two. Each time, I've purchased using equity."

Real estate becomes an even more powerful wealth-building tool through the power of leveraging, or making a relatively small investment to earn a return.

"If you buy stocks worth $100,000, you customarily have to put down $100,000," Velz said. "On a $100,000 house, you put down a maximum of $20,000, but you get appreciation on the whole amount. A lot of the value in real estate is about leverage."

Assume that over time that $100,000 house gains 10 percent in value, after selling costs and the like. When it sells for $110,000, the $10,000 profit is equivalent to a 50 percent return on that $20,000 investment. (This example assumes the monthly cost of the property is the owner's cost of housing, which he would otherwise pay to a landlord.)

And in this era of low down payments, many homeowners put up less than 20 percent of the purchase price. In that same example, if the buyer made a down payment of only 10 percent, he would receive a 100 percent return.

"The more you leverage, the more gains you can see," Velz said. "The moral of this story is that even if house prices go up 5 percent a year and stocks go up 10 percent a year, leveraging makes homeownership come out ahead."

That's what Mark Siciliano, who owns a home in Arlington and has other investments, thinks about the performance of his portfolio.

"My house has probably increased more than my stock market investments have over the past 13 years," Siciliano said. "It certainly feels that way. There have been very few times, if any, that the house has actually decreased in value. Equity in your home feels safe. Money in the stock market doesn't."

Over time, economists say, stocks will return about 8 percent a year, bonds 6 percent a year and housing 5 percent.

Those are historical averages, though. In a given year, any of those investments could rise or fall.

Housing values do fall. Housing economists love to point out that national housing prices have never declined on an annual basis since recordkeeping began in 1969. But that's not completely true.

In 11 of those 33 years, house prices rose less than the rate of inflation, so they suffered a net decline.

Economists point out, though, that when prices fall, only homeowners who have to sell do so.

"The real estate market often dries up when prices fall," Zandi said. "With stocks, you'll always find a buyer and a seller. It's just a matter of price. The housing market just doesn't clear at low prices."

Real estate is a long-term hold, not a get-rich-quick scheme, experts caution. Many economists, agents and brokers say a buyer should hold a property for at least five years to be sure of getting a return. Statistics show that the longer a property is held, the better the return.

According to a report from Harvard's Joint Center for Housing Studies, a homeowner who experiences an annual appreciation rate of 5 percent and who made a cash down payment of 10 percent will generally receive a return of 225 percent on his investment after holding the home for five years. The rate of return on the down payment jumps to 623 percent after 10 years.

After holding a property only one year, however, the general rate of return is negative 15 percent, considering the low level of appreciation over just one year and the costs involved in selling a property, the study shows.

Brian Jans said he realized too late the benefit of holding real estate long term.

"We bought a townhouse in Springfield for $140,000 a few years ago and then sold it two years later for $165,000," Jans said. "Now they're going for $225,000."

"I never should have sold that townhouse," he said. "I should have just kept renting it, even with the headaches that come with renting. It makes me sick just thinking about it."