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Confidence in Real Estate Investment Wanes

Gold Ascends as Confidence in Real Estate Investment Wanes

Posted on May 24, 2023
Writer: James Miller

Key Points:

  • A declining number of Americans view real estate as the premier long-term investment compared to gold or stocks.
  • Faith in real estate has significantly dropped in the past year, while confidence in gold investments has dramatically risen.
  • The belief in stocks or mutual funds as the best investment is nearing its lowest point in a decade.

In the nation’s capital and beyond, a shift is happening. Although real estate remains the preferred long-term investment for most Americans, its dominance has slipped considerably compared to previous years. This trend becomes even more apparent when you look at the surging faith in gold as a reliable store of value.

As shown in a recent Gallup study, 34% of Americans have chosen real estate as their preferred investment, a figure that aligns with the pre-pandemic era, 2016 to 2020. However, the past year’s rise in interest rates has quenched the previously hot housing market, leading to a decline in enthusiasm for real estate investments.

Conversely, gold’s appeal as a safe haven investment has grown substantially, increasing from 15% in 2022 to 26% today. As a result, gold now stands as the second most favored investment, surpassing stocks.

With the stagnation of U.S. stock indices over the past year, fewer Americans today (18%) than in 2022 (24%) view stocks or mutual funds as the best investment. This inclination towards stocks is currently at the lower end of the 17% to 27% range that has been observed since 2011.

The number of Americans advocating for savings accounts/CDs and bonds as the best investment options have slightly increased, though these remain less popular.

Cryptocurrency’s Influence on Investment Rankings

Over the past two years, Gallup has included cryptocurrency as an investment option in its survey. Last year, 8% of Americans opted for cryptocurrency, putting it ahead of bonds. However, following the implosion of the crypto exchange company FTX and Bitcoin’s current value, a mere 4% of Americans consider cryptocurrency the best investment.

Despite including cryptocurrency in the list of potential investments, real estate remains the most popular choice, followed by gold, stocks, savings accounts/CDs, and bonds.

The appeal of cryptocurrency has experienced a downturn among most demographics, but notably among young and middle-aged adults. The percentage of adults aged 18 to 49 endorsing cryptocurrency has dropped from 13% in 2022 to 5% today. Those aged 50 and older remain statistically unchanged at 4%.

Read Mcgruff’s take on Why Not Invest in Cyrpto IRA

Faith in Stocks Wanes Among Stock Owners

The past decade has seen stock owners’ faith in stocks as the best long-term investment fluctuate between 24% (in 2012) and 37% (in 2019). Today, this confidence sits at 25%, following a decline over three of the past four years. More stock owners currently opt for real estate (36%) than stocks, with a similar proportion (24%) favoring gold.

Final Thoughts

The ebb and flow of Americans’ perception of the value of various long-term investments often mirror short-term fluctuations in the performance of these investments. When real estate or stock prices rise, their popularity as the best investment increases, and vice versa. Gold, however, tends to shine brightest when confidence in both real estate and stocks dwindle, which is typically during times of economic uncertainty, as we’re witnessing today.

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