Americans prefer real estate over alternatives

Photo credit: Cyndie

A study by Gallup reveals that over the past 12 years, perceptions of the best long-term investment product has shifted away from real estate in favour of stocks and mutual funds - and back to real estate again.

Indeed, in the wake of the housing crash, 37 per cent of Americans felt that real estate was the best long-term investment, down from 50 per cent. That declined to 25 per cent last year, but in 2014, 30 per cent of respondents said they preferred real estate.

Gold was the most popular long-term investment among Americans in 2011, a time when gold was at its highest market price and real estate and stock values were lower than they are today. Gold prices dropped significantly after that and it lost favor with Americans. Now, the precious metal ties with stocks, with 24 per cent of Americans highlighting each as the best long-term investment.

Interestingly, though, Americans on a lower income (less than $30,000 per annum) are more likely to choose gold over real estate, with 31 per cent naming the precious metal as their long-term product of choice - compared to 18 per cent of upper-income Americans.

Upper-income Americans are much more likely to say real estate and stocks are the best investment, possibly because of their experience with these types of investments, with 87 per cent saying they own their home - ahead of 66 per cent middle-income and 36 per cent lower-income. 33 per cent of homeowners said real estate was the best long-term investment choice compared to 24 per cent of renters.