You're kind of falling into a similar logic trap because you can't compare those two things as equal. Someone buying a 350k house with a mortgage isn't the same as someone who has 350k cash in hand to invest in S&P.

I also did kind of pull that example out of thin air to make a really basic example of a cognitive bias that some home buyers tend to have. I apologize if that was misleading.

The simple fact is that in most cases the rate of return on property is different. A mortgage is still just a loan, with the added incentive of helping you own something that should increase in value for the future. If it had the same rate of return as the S&P, we'd all be urging people to rush out and buy property. If you have enough money to outright buy a house, the reality is that you still shouldn't. Investing is almost always the safer bet.