Home › Blogs › Cheryl Bourland's blog ›

Real Estate Tops Investment Survey

Submitted by Cheryl Bourland on July 25, 2015 - 4:51pm

Wondering what the best long-term investment option is for your money? According to Bankrate's latest Financial Security Index survey, most Americans agree that the answer is real estate. Conducted between July 9 and 12, the survey asked 1000 adults living in the continental United States, "For money you wouldn't need for more than 10 years, which one of the following do you think would be the best way to invest it?" With 27% of respondents selecting it, real estate became the top choice for the first time in three years.

 

After leading the survey in 2013 and 2014, CDs and other cash investments fell to second place with 23% of responses. Here is the full breakdown of the survey choices:

 

  1. Real estate: 27%
  2. Cash Investments (Savings accounts and CDs): 23%
  3. Stock market: 17%
  4. Gold/precious metals: 14%
  5. None of these: 8%
  6. Don't know: 7%
  7. Bonds: 5%

 

The lack of confidence in bonds is not surprising, given the extremely low yields seen in recent years. However, the third place finish for the stock market is somewhat odd, considering the strong performance year-over-year. Greg McBride, Bankrate's chief financial analyst, says "We're not seeing the bunker mentality from individual investors to the same extent of the past few years, but the preference for real estate over, say, the stock market, does beg the question of whether or not Americans are again viewing residential housing as a golden ticket."

 

It would seem that Americans have good reason to feel confident about the housing market. After all, new home sales in May reached their highest level in seven years, while existing home sales were up 9.2% year-over-year. In addition, home prices have risen steadily, gaining 26.8% since their low-point in February of 2012.

 

As is usually the case, there was some disagreement between different demographics within the survey. The youngest age group, those 18 to 29 years old, selected cash investments as their top choice (32%). However, those between the ages of 30 and 49 chose real estate at the same rate (32%). Real estate was also chosen most often by those in the middle income bracket ($30,000-$49,999), while those in higher brackets preferred stocks and those in lower brackets preferred cash investments.

 

Overall, the financial security index score fell in July, mainly due to decreasing confidence in job security and levels of savings.

 

Source: Survey reveals Americans' top investment choice: Real estate