Some readers have written to say that my Tuesday column is off-base because the main reason people want to buy their homes is for intangible, feel-good reasons, not financial ones. That may be true; Americans understandably derive a lot of psychic benefits from owning their own home. But they also overstate the financial benefits of investing in a house, and therein lies the problem.

Fannie Mae, in its National Housing Survey, asks Americans about “the best reason to buy a house,” giving them two options: “financial benefits” (like investment, wealth building, and tax benefits), or “the broader security and lifestyle benefits of homeownership” (like providing a good and secure place for your family, control to make renovations, etc.) In the March survey, 43 percent of respondents choose the  “financial benefits,” while 55 percent chose “the broader security and lifestyle benefits.” So yes, the psychic benefits of ownership appear to be a bigger driver for buying a house than the financial ones.

But here’s the part that’s irksome: The same survey also asked people to rate different kinds of investments as a “safe investment with a lot of potential,” “safe investment with very little potential,” “risky investment with very little potential,” or “risky investment with a lot of potential.” Buying a home is almost always the option with the highest share of respondents calling it a “safe investment with a lot of potential.”

Gallup has found similar results when it asked respondents to choose the “best long-term investment” from a set of options. Housing was the most common choice, followed by a tie between stocks/mutual funds and gold:

Again, the many psychic/lifestyle/security benefits of homeownership are perfectly valid and important reasons to buy. The problem is that people misunderstand and overstate the financial benefits of this decision, relative to other ways they could invest their savings, and that behavior leads to buying more house on the margin. If we understood that housing was good as somewhere to live but not so great as an investment, we would probably buy smaller houses, and downsize more quickly after children left the nest.