Americans are beginning to shift their investments to other areas as real estate fell not one but two spots from being the top investment choice back in 2016.
Americans across all ages said that real estate is their third pick for the investment of money they won’t need for more than 10 years, according to a survey by Bankrate.
The survey showed 32% of American prefer to invest in stocks, followed by 24% who say cash investments is best and 22% in real estate. This is down from 2016, when real estate was the No. 1 choice.
In fact, Bankrate explained that this is the first time in four years that respondents didn’t favor real estate as their top choice.
“For investment horizons of longer than 10 years, the stock market is an entirely appropriate investment,” Bankrate Chief Financial Analyst Greg McBride said. “Cash is not, and especially if you’re not seeking out the most competitive returns.”
The majority of Americans actually favor investing in the stock market, including 33% of Gen Xers, 38% of Baby Boomers and 44% of the Silent Generation, however Millennials favored cash investments. The survey showed 30% of Millennials said cash is their favorite long-term investment.
Bankrate explained Americans are backing off of real estate because it is currently in a slump. It pointed out existing home sales dropped 2.2% in June, and new home construction and mortgage applications have also fallen even as home prices continue to rise.
The decrease in Americans who want to invest in real estate cause also be a result of many Millennials losing hope in, have lost hope in or don't want the traditional American Dream. A recently study by Bank of the West shows only 54% of Millennials believe the American Dream is attainable, and nearly 25% say they’ve given up their dream of homeownership.
Other investments Americans mentioned included gold and precious metals, which 9% of Americans prefer, another 8% prefer bonds and just 2% said they prefer to invest in bitcoin and cryptocurrency.