A recent Survey of Consumer Finances study released by the Federal Reserve reveals the net worth of homeowners is forty times greater than that of renters. If you’re wondering if homeownership is a good investment, the study clearly answers that question, and the answer is yes.
Do Americans believe a home is a better investment than stocks?
In a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York notes that 93.3% of Americans believe buying a home is definitely or probably a better investment than buying stocks.
Here’s how the results break down: ![Stacked Bar Graph: Is Buying a Home or Buying Stocks the Better Investment? 93.3% (39.5%: probably; 53.8%: definitely) say that Buying a home is the better investment. 6.7% (1.9%: probably; 4.8%: definitely) say Buying stocks is the better investment. Source: SCE Housing Survey [Cogent Equities logo]](/uploads/6/2/7/9/62795545/041421-buyingahomevsstocks-bargraph-01_orig.png)
The survey also shows a wide range of reasons why Americans feel that way (respondents were able to pick more than one answer):
![Bar Graph: Reasons Why a Home Is a Better Investment than Stocks. Housing prices less volatile: 55.7%; Desired living environment, provides stability: 53.9%; tax reasons: 47.5%; savings from rents sufficient to cover costs: 43.9%; leverage: 43.3%; Higher housing returns: 38%; Commitment device: 33.8%; Locks in Housing costs: 28.8%. Source: SCE Housing Survey [Cogent Equities logo]](/uploads/6/2/7/9/62795545/041421-reasonswhyahomeisabetterinvestmentthanstocks-bargraph-01_orig.png)
Bottom Line
The data show how strongly Americans believe in homeownership as an investment. That belief is warranted. The Liberty Street Economics blog put it best by saying:
“Housing represents the largest asset owned by most households and is a major means of wealth accumulation, particularly for the middle class.”
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Cogent Real Estate Equities, LLC does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Cogent Real Estate Equities, LLC will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
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