Real Estate Returns as America’s Favorite Long-Term Investment

June 24, 2014

real estate game pieces and moneyWhere would you choose to invest long-term: real estate, bonds, gold, stocks or savings accounts? According to the recent Gallop April 3-6 Economy and Personal Finances poll, 30 percent of Americans now say they think real estate is the best long-term investment, beating out stocks and the 2011 crowd favorite — gold — by six percent each and leaving savings accounts and bonds far back in its dust.

Why do more Americans favor real estate for long-term investment? The support for real estate is most likely due to steadily rising home prices as the U.S. housing market continues to recover from the 2007 subprime mortgage crisis. The rising home prices are giving Americans the confidence to venture back into the housing market, which, during the 2002 real estate boom, had 50 percent of Americans saying real estate was the way to invest. Also, gold prices dropped drastically after 2011, prompting many Americans to turn to other investment options besides gold bars, coins and nuggets, and many turned to real estate.

While favor for real estate is winning the investment battle for the overall population and for households making $75,000 or more each year, it is tied with favor for gold in the $30,000 to $74,999 income range and trails gold by three percent for those who make less than $30,000 a year. This difference from the overall population is probably due to upper- and middle-income Americans’ better familiarity with real estate, with 87 percent and 66 percent of them respectively saying they own their own home, while only 16 percent of lower-income Americans say the same.

However, favor for real estate investment continues to climb out from under gold with a steady upward incline, while favor for gold investment has leveled out at a steady 24 percent for the past year or so and shows no sign of rebounding. With favor for savings accounts at 14 percent, favor for bonds at a measly six percent and continuing to fall and favor for stocks increasing at a much slower rate than real estate, real estate looks like it will be the uncontested champ of long-term investment for a good while.

So, if you have been on the fence about getting back into the housing market, afraid you will lose money instead of gaining it, hopefully the results of this Gallop poll will give you the confidence you need to invest in real estate. With so many more Americans favoring real estate investment over any other type, you can be sure you will be able to sit back and watch your investment grow as the nation’s housing market continues to get back to its former glory.

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