The swings in the Dow Jones industrial average command the headlines. And with stocks at a five-year low, more American workers and retirees are fearful for their financial future than at any time since the dark days of the '70s. Yet the investment that truly matters for many Americans is their home. The news on that front has been good. Over the past five years, when stocks have journeyed nowhere during a wild roller-coaster ride, home prices have appreciated by more than 20 percent.

People are pouring money into real estate. By almost every measure-home sales, home building, mortgage refinancing, remodeling expenditures--the housing market has been on a record run. The biggest factor behind the boom is cheap mortgage rates. Fierce competition in the mortgage market has driven down fees and loosened down payment requirements too.

Then there is the lure of owning a real asset when nearly $8 trillion in stock market wealth has vaporized. A four-bedroom center hall colonial, a one-bedroom condo with a brick wall, a townhouse nestled alongside a mountain ridge, and a mobile home blocks from the ocean are made of solid materials. If you owned Enron or WorldCom stock, you have almost nothing of value remaining but a tax loss to carry forward. But if the price of your house goes down, you still have a place to call your own, a kitchen to cook in, and a family room for entertaining friends.

Yes, real estate is hot—too hot. The financial risk is that thousands upon thousands of people are investing in an asset at the top of the market. It's disturbing to hear real estate agents pushing people to buy, hyping the recent prices increases, and warning that hesitant buyers will only pay more later. Hokum. The housing market is at or near a peak. The next move could be down. For instance, demand could finally cool off if the economy weakens again and job losses mount. Alternatively, if the economy does regain its upward momentum then mortgage rates will start climbing. Like the stock and bond market, real estate prices can go down or stagnate for long periods of time.

I know—a dollars-and-cents return-on-investment calculation barely captures the emotional pull of a home. "This is the true nature of home," said the 19th century art critic John Ruskin. "[I]t is the place of Peace; the shelter, not only from injury, but from all terror, doubt and division." That said, a home is the most expensive investment most of us ever make. And considering the dramatic run-up in prices, the smarter course is to be a seller rather than a buyer. If you want to make an investment, stocks are far more intriguing than real estate.