it's not so much that real things shouldn't be investable, but that a primary residence has unique properties (lke the lack of substitutability) that make it unlike commodities. and commodities are what capitalistic free markets was design for and for which it works best.

so a free-for-all market may not be ideal for a society when it comes to primary residences. i'd go so far as to argue that the american identity rests on the psychological safety of a reliable place to live (or at least it used to, before we turned them into slot machines).

entrepreneurship couldn't have flourished without it, along with reasonable bankruptcy laws that (until recently) fostered greater risk-taking among the labor class. it's hard to be the rugged individualist if a risk you take can lead to you and your family's death.