America's Favorite Long-Term Investment: Why So Many Love Real Estate

When it comes to long-term investments, Americans have an absolute favorite: real estate!

According to a recent Gallup poll, a whopping 36% of Americans believe real estate is the best long-term investment, outshining stocks (22%), gold (18%), savings accounts (13%), bonds (4%), and cryptocurrencies (3%).

But why is that? Let’s explore why so many people see owning property as the ultimate way to build wealth over time.

The Popularity of Real Estate as a Long-Term Investment

For 11 years running, real estate has consistently topped the list of preferred long-term investments in Gallup’s annual Economy and Personal Finance survey.

(Insert Chart 1: Americans’ Perceptions of the Best Long-Term Investment)

Several factors drive this preference for real estate:

  • Tangible Asset: Unlike stocks or bonds, real estate is a tangible asset you can see and touch. This physical presence provides a sense of security that’s hard to beat.

  • Appreciation Over Time: Historically, real estate values have shown steady appreciation. From the 1990s to the 2020s, home prices have consistently risen, making real estate a reliable investment.

  • Dual Benefits: Owning a home offers potential financial returns and a place to live. This unique dual benefit adds to its appeal.

Gallup’s poll found this preference holds true across all income levels, with 33% of lower-income households, 36% of middle-income households, and 40% of upper-income households believing real estate is the best long-term investment.

Several factors drive this preference for real estate:

  • Tangible Asset: Unlike stocks or bonds, real estate is a tangible asset you can see and touch. This physical presence provides a sense of security that’s hard to beat.

  • Appreciation Over Time: Historically, real estate values have shown steady appreciation. From the 1990s to the 2020s, home prices have consistently risen, making real estate a reliable investment.

  • Dual Benefits: Owning a home offers potential financial returns and a place to live. This unique dual benefit adds to its appeal.

Gallup’s poll found this preference holds true across all income levels, with 33% of lower-income households, 36% of middle-income households, and 40% of upper-income households believing real estate is the best long-term investment.

Real Estate vs. Other Investments

While real estate is the top choice for many, it’s important to see how it compares to other investments. Stocks, for example, have historically offered higher returns. From 1990 to April 2024, the S&P 500 surged by 1,325%, while the S&P CoreLogic Case-Shiller U.S. National Home Price Index rose by 308%.

However, stocks come with higher volatility. Real estate, on the other hand, tends to provide more stable growth. Even during economic downturns, such as the Great Financial Crisis of 2008, real estate has shown resilience and recovery.

This is highlighted when you look back at U.S. home price growth by the decade. (Note: link to this article on your website if you posted previously).

U.S. home price growth by decade:

  • 1990s: +30.1%

  • 2000s: +47.3%

  • 2010s: +44.7%

  • 2020-2024: +47.1%

Locally, home prices have risen XX% over the past year, and XX% since 2020.

Is Real Estate the Right Investment for You?

Real estate can be a fantastic long-term investment, especially in a growing market like [Market]. But before diving in, consider your individual situation:

  • Long-Term Commitment: Buying a home is a long-term play. If you plan to move in a few years, it might not be the best fit.

  • Financial Strength: Real estate requires a down payment, closing costs, and ongoing maintenance expenses. Make sure you have a solid financial foundation.

  • Investment Goals: Consider your overall investment goals. If you prioritize high returns and easy access to your money, another investment might be a better fit.

And remember, diversification is key to a balanced investment strategy. Financial experts recommend spreading investments across various assets to hedge against different market forces and increase the odds of a net profit over the long term. This means integrating real estate within a broader portfolio that includes stocks, bonds, and other investment vehicles.

Bottom line: While poll results show that Americans prefer real estate as a long-term investment, there’s no one-size-fits-all answer. Always consult with your financial advisor when planning to invest for your future, as the best option depends on your financial goals, risk tolerance, and investment timeline.


jennifer Sloan