The federal government through various tax mechanisms encourages home to be viewed as investments: 1. Mortgage tax deduction. 2. Sales tax exclusion on the first $500,000 3. Capital gains tax rate on the remainder.

Local government through zoning codes act as cartel limit the supply of homes which work to increase prices.

The financialization of homes is a direct result of government programs.

If you allow private ownership, it's gonna be a significant financial asset that people work to optimize (which is not very distinguishable from an investment).

Personally, I like the problems you end up with in market system that has sufficient supply (which we don't particularly have).