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Economy
More Americans Say Real Estate Is Best Long-Term Investment
Economy

More Americans Say Real Estate Is Best Long-Term Investment

by Jim Norman
Chart: data points are described in article

Story Highlights

  • 35% of Americans now say real estate is best long-term investment
  • Stocks (22%) and gold (17%) fall further behind as top choice
  • Age, income, education, gender all related to views of best investment

WASHINGTON, D.C. -- Real estate, already Americans' top pick as the "best long-term investment" for the last two years, has increased its lead over four other investment choices. Thirty-five percent of Americans now choose real estate, compared with 22% for stocks and mutual funds, 17% for gold, 15% for savings accounts/CDs and 7% for bonds.

Trend: Americans' Choice of Best Long-Term Investment

Real estate and gold have switched positions over the last five years as gold prices tumbled and home sales recovered from the 2007-2009 housing market collapse. In August 2011, 34% of Americans named for the long term, compared with 19% for real estate.

Stocks and mutual funds, in spite of making major gains in the past five years after the historic 2008 stock market crash, have struggled to gain favor in the public's eyes. In August 2011, with the Dow Jones Industrial Average still below pre-crash levels, 17% of Americans chose stocks and mutual funds as the top long-term investment. The Dow in April 2016 is above its pre-crash high of 14,164 by almost 4,000 points, but the percentage choosing stocks or mutual funds as the best long-term strategy has grown only to 22%. That figure did reach 25% last April, but dipped slightly this year after the Dow's roller-coaster ride in recent months.

Meanwhile, as the average sale price of new homes in the U.S. increased from $259,300 in August 2011 to $348,900 in February of this year, the percentage of Americans picking real estate as the best long-term investment almost doubled. During approximately the same time span -- from August 2011 to April of this year -- gold prices plunged from $1,910 to $1,254 per ounce, and the percentage thinking gold would be the best investment was cut in half.

Age, Income, Education, Gender All Relate to Investment Views

Combined results from the 2015 and 2016 Â鶹´«Ã½AV polls that asked about long-term investment preferences reveal some clear differences among key subgroups.

  • Men are more likely than women to think gold is the best investment. Women are more likely than men to favor savings accounts.
  • College graduates are more than twice as likely as nongrads to favor stocks -- 37% to 17%. Those without a degree are more likely than grads to favor gold (21% to 12%) and savings (19% to 8%).
  • Americans younger than 30 are the least likely (26%) age group to think real estate is the best investing choice and are the most likely (26%) to favor savings.
  • Americans with higher incomes are more likely than those with lower incomes to favor stocks and less likely to choose savings.
  • Stock owners are much more likely (33%) to pick stocks as the best investment than those who do not own stocks (12%).
  • Renters are about as likely (32%) as homeowners (34%) to list real estate as the best choice.
Which of the following do you think is the best long-term investment?
Real estate% Stocks, mutual funds% Gold% Savings, CDs% Bonds%
Men 32 25 22 12 5
Women 33 21 14 18 8
College degree 35 37 12 8 5
No college degree 32 17 21 19 7
18 to 29 26 20 18 26 8
30 to 49 37 27 15 12 6
50 to 64 34 22 21 13 6
65 and older 33 22 19 13 6
Less than $30,000 28 14 19 25 8
$30,000-$74,999 34 22 22 13 7
$75,000 37 34 13 9 4
Stock investors 34 33 15 10 6
Noninvestors 32 12 22 22 8
Homeowner 34 26 19 11 6
Renter 32 19 18 20 8
Combined results from April 9-12, 2015, and April 6-10, 2016, Â鶹´«Ã½AV polls

Bottom Line

Both the housing market and the stock market have recovered from catastrophic losses suffered in the last decade, with average house prices and the Dow well above their pre-crash high marks. But Americans have been much more likely to regain confidence in real estate than in stocks as "the best" long-term place to invest their money. The split between the two investment options grew again in the last year as the stock market's . With housing prices showing a steadier path upward in recent months, even stock investors are about as likely in the April 2016 poll to choose real estate (37%) as stocks (32%) as the best long-term investment.

The growing gap between stocks and real estate, and the continued rise of the latter as the preferred choice for long-term investments, may simply be a return to the norm. In a 2002 Â鶹´«Ã½AV poll that did not include gold as a choice, 50% named real estate as the best long-term investment, compared with only 18% for stocks, 16% for savings accounts and 13% for bonds.

Survey Methods

Results for this Â鶹´«Ã½AV poll are based on telephone interviews conducted April 6-10, 2016, with a random sample of 1,015 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level.

Each sample of national adults includes a minimum quota of 60% cellphone respondents and 40% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.

View survey methodology, complete question responses and trends.

Learn more about how the works.


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