Author: Joey Pizzolato in Daily Dose, Featured, Headlines, Market Studies, News July 19, 2017 0
Real Estate is American’s favorite long-term investment, according to a recent poll by Bankrate. In its Financial Security Index, which was conducted by Princeton Survey Research Associates International, they asked 1,002 adults via telephone—for money that wouldn’t be touched for at least 10 years—what did they think was the best investment?
Twenty-eight percent said real estate, while cash investments came in a close second at 23 percent. Bringing up the rear was the stock market, at 17 percent; gold, at 15 percent; and bonds at 4 percent. Six percent of those polled answered “other.” Bankrate suggests that the reason real estate is the favorite is three-fold: rising home prices, perpetually low interest rates, and tax incentives. Plus, there’s the added bonus of having a place to call home, permanently.
However, in terms of return on investment, real estate historically doesn’t have the highest yield. Bankrate cites a study by professors at the London School of Business that showed average returns on housing was only 1.3 percent annually, and notoriously difficult to sell even in a strong market. In comparison, stocks usually returned four times that amount.
This doesn’t seem to matter, although, there is a slight generational gap when it comes to the idea that real estate is the best investment. More Gen Xers and Baby Boomers believe real estate is a better investment than millennials that do, but not by a large margin. Millennials are split in their vote—30 percent for cash investment, and 30 percent for real estate investment. One reason for this could be that real estate is less risky when compared to stocks, and because millennials have less wealth that their predecessors, are less willing to play with it and take risks?
Real estate, in that sense, is a safe investment, especially when compared to other routes.