Survey: Real Estate Remains Top As Americans’ Favorite Long-Term Investment | Local news

Mortgage rates are rising, inflation is on the rise, and many experts are predicting that a recession could be imminent. Despite these negative impacts on the housing market, real estate remains America’s favorite long-term investment in 2022, according to a just-released Bankrate survey. It was the third time in the past four years that real estate has taken top honors.

A total of 29% of Americans said real estate is their top choice for investing money they won’t need for 10 years or more. Real estate made a strong showing, and it was the second-highest score — behind only the 31% it scored in 2019 — in the 10 years of the survey. In second place in this year’s survey were stocks, which garnered 26% of the American vote.

“Despite the housing market starting to heat up, real estate preferences remain high,” said Greg McBride, CFA, Bankrate’s chief financial analyst. “For the third time in the last four years and the sixth time in the last 10 years, real estate is the preferred way for Americans to invest money that they don’t need for more than 10 years. Despite the brutal bear market in 2022, the stock market was second.”

Bankrate polled 1,025 American adults June 17-20 about their investment preferences. Below are the main findings of the study. Real estate remains the most popular long-term investment

As it did last year and for three of the last four years, real estate topped the list of Americans’ favorite ways to invest money that isn’t needed for 10 years or more. More than 29% named real estate as a preferred long-term investment, the second-highest showing in the Bankrate survey’s 10 years.

Preferred Investments

Here’s the full list of answers and the percentage of Americans who prefer each:

Real estate: 29%

Stock market: 26%

Cash (Savings, CD): 17%

Gold or other precious metals: 9%

Bonds: 9%

Bitcoin/Cryptocurrency: 6%

None of these: 3%

Americans appear to be more enthusiastic about the stock market, even though stocks are down 20% year-to-date at the time of the survey. Preference for stocks as a long-term investment jumped to 26% from 16% in the survey a year ago. This score was below only the preference for stocks in 2018 (32%) and 2020 (28%) over the 10 years of the study.

Cash is in third place, falling from 25% last year to 17% in 2022, although interest rates have risen sharply and are poised to rise further.

“Preferences for cash have declined significantly, indicated by just 17% of respondents, the lowest level of surveys in a decade,” says McBride. “Nothing like the highest inflation in more than 40 years to remind investors of the need to earn higher returns to increase the purchasing power of their nest egg.”

Bonds have been crushed in the market this year, but that didn’t stop respondents from naming them as the preferred investment with the highest rate of return, 9%, in a decade of the survey. This is an increase from just 4% in 2021.

Gold and other precious metals were less popular than last year, falling from 13% to just 9% in 2022, sinking to an all-time low in the decade of the survey.

Cryptocurrency also became less popular, falling from 9% last year to 6% in 2022. Finally, another 3% of respondents said none of these choices was the best place to invest money in the next ten or more years. Many Americans dislike stocks, mainly because of their volatility

Stocks are among the top performers in Bankrate’s survey, but why are investors slightly less bullish on them than on real estate? The study revealed the reasons.

Stock market concerns

Among respondents who did not choose the stock market as their preferred investment for the next decade or more, here are the top answers for why they did not choose it:

“Too much volatility”: 36%

“Scared of the stock market”: 16%

“return on investment will not keep pace with others”: 15%

“The stock market is rigged against individuals”: 14%

“Focused on preserving money, not growing it”: 10%

“Some other reason”: 9%

“Don’t know”: 1%

Age appears to play a role in whether a respondent says volatility is the key factor in their decision, with 44% of Baby Boomers (ages 58-76) and 40% of Gen Xers (ages 42-57) citing it. compared to 29% of millennials (ages 26-41).

In contrast, fear of the stock market is associated more with younger cohorts. About 22% of older millennials (ages 33-41) and 18% of younger millennials (ages 26-32) cite this reason, compared to 15% of Gen Xers and 11% of baby boomers .

Age also appears to be associated with whether Americans say their main reason for not preferring stocks is that the market is biased against individual investors. Younger millennials (20%) and older millennials (17%) responded at higher rates than Gen Xers (13%) and baby boomers (12%).

Income was also related to whether the respondent said stock market manipulation was the main reason they did not prefer stocks. Households earning less than $50,000 per year were twice as likely (18%) to cite this reason as those earning $50,000 or more (9%). Comfort levels with cryptocurrency have fallen along with their price

Americans say they feel much less comfortable investing in cryptocurrency, according to Bankrate’s latest survey. Only 21% said they were “somewhat comfortable” or “very comfortable” with cryptocurrency, compared to 35% in last year’s survey.

In contrast, 75 percent of respondents said they were “not too comfortable” or “not at all comfortable,” compared to 61 percent in last year’s data.

Comfort with cryptocurrency

Here are the full results:

Very comfortable: 5%

Somewhat comfortable: 16%

Not very comfortable: 29%

Not comfortable at all: 47%

Last year, 28% of respondents said they were not very comfortable, while 33% said they were not at all comfortable.

Age appears to be related to comfort level of investing in cryptocurrency, with younger investors reporting higher comfort levels.

34% of Gen Z said they are somewhat or very comfortable with investing in crypto.

29% of millennials report being somewhat or very comfortable.

Only 21% of Gen Xers answered the same.

Only 11% of baby boomers said they were somewhat or very comfortable with crypto as an investment.

On the other hand, a total of 66% of Gen Z say they are either not very comfortable or not at all comfortable investing in cryptocurrencies. Millennials report a similar result (68%).

Investment preferences vary widely by age, income and gender

The Bankrate study also revealed key ways in which investment preferences differ across groups, particularly by age, income and gender.

Of all generations, millennials had the strongest preference (33%) for investing in real estate for money not needed in the next decade or more, consistent with results from previous years. And Gen Z and Gen X also preferred real estate over other options. In contrast, baby boomers prefer the stock market (33%) over real estate (25%). Boomers’ preference for stocks surpassed that of all other generations.

In addition to being a baby boomer favorite, the stock market is also the top choice for households headed by a college graduate (40%) and households earning more than $75,000 a year (40%).

About twice as many women (22%) chose cash investments such as savings accounts and CDs as their top choices compared to men (11%). Older millennials have the highest preference for cash investments of any age group, second only to their preference for real estate (33%).

Methodology

This survey was conducted for Bankrate by SSR on the Opinion Panel Omnibus platform using both the phone and the web. The interviews were conducted from June 17-20, 2022, among a sample of 1,025 adults. The data are weighted and intended to represent all US adults and are therefore subject to statistical errors typically associated with sample-based information.

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