Real Estate Tops List of Long-Term Investment Choices for Americans
Real estate continues to be Americans’ preferred long-term investment, according to Gallup’s annual economy and personal finance survey.
In the survey conducted in April, 36% of respondents chose real estate as their top investment choice, a figure consistent with last year. Stocks or mutual funds were the second most popular choice at 22%, followed by gold at 18%, and savings accounts or certificates of deposit at 13%.
Bonds and cryptocurrency lagged far behind, with only 4% and 3% of respondents, respectively, naming them as the best long-term investments.
Gallup attributed the high ranking of real estate and stocks to their recent strong performance. Although U.S. real estate values have dipped from their peak in the fourth quarter of 2022, they remain significantly above early 2021 levels. Stock values have also hit new highs this year.
Since 2014, real estate has consistently been the top choice, with 30% to 45% of respondents selecting it each year. In 2013, real estate tied with gold and stocks for first place; in the previous two years, it trailed gold.
Americans’ preference for real estate aligns with their expectations of rising local home values, according to the report.
Income and Political Differences
The survey revealed that Americans at all income levels view real estate as the best investment, but their preferences for other investments vary by income and political affiliation.
Among upper-income Americans (incomes of at least $100,000), 31% named stocks as the best investment, compared to 14% of lower-income Americans (incomes of less than $40,000). Lower-income respondents favored gold (23%) and savings accounts (20%) more than their upper-income counterparts, of whom only 7% considered savings accounts the best investment.
Political affiliation also influenced investment preferences, particularly regarding gold. Twenty-seven percent of Republicans chose gold as the best investment, compared to 7% of Democrats and 18% of independents. Last year, 38% of Republicans named gold as their top choice, versus 12% of Democrats and 27% of independents.
Since 2013, Republicans have consistently been more likely than Democrats to view gold as the best investment. This gap has widened significantly since 2020. Over the past five years, Republicans have also increasingly diverged from independents in their views on gold.
Most subgroups are now more likely than a year ago to favor stocks as the best investment and less likely to favor gold. The notable exception is respondents aged 55 and older, whose opinions have remained unchanged.
Stock Ownership Remains High
The survey found that 62% of U.S. adults have money invested in the stock market, through individual stocks, stock mutual funds, or retirement savings accounts. This percentage is essentially unchanged from last year and marks a return to pre-2008 recession levels when 60% or more Americans owned stock.
Stock values reaching record levels earlier this year likely contribute to the increased preference for stocks as a top investment choice. Stock ownership is highly correlated with income: 87% of upper-income Americans own stock, compared to 25% of lower-income Americans and 65% of middle-income Americans (incomes between $40,000 and $100,000).
