More Americans believe real estate is the best arena for long-term investments than at any time over the past three years.
A recently released Gallup Economy poll revealed that 30 percent of surveyed U.S. adults currently rank property ownership above other posed options for investment, including gold, stocks and mutual funds, savings accounts or CDs, and bonds. That figure represents a significant uptick from a year ago, when just 25 percent of survey respondents displayed such confidence in the real estate market. By comparison, 24 percent listed gold or stocks and mutual funds as their optimal investment, while 14 percent cited savings accounts or CDs, and just 6 percent chose bonds over all other options.
Equity stokes confidence
The Gallup analysis noted that the housing market's gradual improvement over the past year has helped many homeowners regain equity and, in turn, confidence in property ownership as a sound investment. Home prices have risen steadily throughout many areas of the country over the past year, allowing many Americans to emerge from tenuous underwater-mortgage situations and, in many cases, acquire leverage that can be used for the purpose of selling, refinancing or reinvesting based on their home's value.
"This current improvement in prices may be why more Americans now consider real estate the best option for long-term investments," read the release. "In 2002, during the real estate boom that preceded the mortgage crisis and before gold was offered up as an option in the question, half of Americans said real estate was the best investment choice."
That attitude changed, mostly after the subprime mortgage crisis came to a head in 2007 and 2008, with many Americans losing accrued value, or worse, their homes altogether. In April 2008, for example, just 27 percent of survey participants referenced real estate investments as the most reliable, while 29 percent favored savings accounts or CDs, likely as a result of the housing and stock market's instabilities and the general uncertainty of the time.
Realizing the dream
Upper-income Americans were the segment of the surveyed population most likely to list real estate as their top investment, with 87 percent of them already owning a home. Meanwhile, only 25 percent of respondents between 18 and 29 years old replied accordingly. That reticence to join the home buying population is a concern for the housing industry, but with improved employment and wages, the market can expand and create opportunities for all.
First-time home buyers, no matter their budget or preferences in a desired property, should remember the importance of a home inspection. Having a thorough examination of the home conducted can help ensure that a real estate investment is indeed, ultimately, a sound one.