There's nothing sexy about writing a mortgage check each month. But for people hoping to become affluent someday, it's a wise thing to do.

        Homeownership ranks as the greatest source of wealth for households with net assets above $100,000, according to the Consumer Federation of America and Providian Financial. But the study also found homeownership to be an underappreciated wealth-building tool.

        That's not surprising given that real estate hasn't enjoyed the supercharged returns of the stock market in recent years.

        U.S. housing prices rose just 4.5 percent on average from 1980 through the first quarter of 2001, according to a separate report by the Office of Federal Housing Enterprise Oversight. By contrast, stocks in the Standard & Poor's 500 index surged at a 15.5 percent annual clip.

        Indeed, the CFA/Providian found that millionaires have more wealth tied up in stocks than in their own homes.

        But owners derive a utilitarian benefit from their homes; and they tend to earn more than the above figures imply.

        Why? Because they use debt to enhance returns in ways that would be unthinkable for stock-market investors. On average, buyers make down payments equal to just 10 percent or so of their homes' purchase prices.

        Leverage does increase risk, but it also amplifies returns as long as the asset appreciates. Hence, most homeowners really earn more than 4.5 percent over time because they're using someone else's money.

        Other factors that make homeownership wise include:

        • Automatic investing. With most loans, each mortgage check builds up equity, slowly in the early years and rapidly later on. • Tax incentives.Mortgage interest is tax-deductible, appreciation builds up untaxed until a property is sold, and even then most homeowners can permanently exclude most if not all their capital gains from taxes, up to $250,000 for singles and $500,000 for couples.

        • Lower volatility. Homes don't bounce around in price like stocks.

        In short, homeownership can be a great way to build wealth, as the CFA/Providian study shows. And it gets even better combined with a long-term stake in stocks.

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The case for home ownership