More Americans Back Real Estate

Following a shift in the housing market caused by the global pandemic, more people are homeowners now than ever before. This has largely led to an overall sentiment shift towards owning a home. More homeowners than ever before are to realizing the overall benefits of owning a home. The opinion towards real estate according to Americans has never been better. According to the annual Gallup poll, not only is real estate viewed as the best investment for nine years running, but more Americans also chose this answer than ever before. This is how and why more Americans back real estate than ever before.

Gallup Poll Shows More Americans Back Real Estate

As shown in the graph below, the results of the Gallup poll since the inception of the poll have changed very little. More people than ever before chose real estate, and this is no surprise as we have seen the strength in the housing market. This strength has led to many people becoming homeowners, and allowing long-time homeowners to make equity gains at historic rates. Other than the few years following the Great Recession, real estate has been shown as the best investment. More Americans back real estate now than ever before, and this trend will likely continue until the dynamic changes.

More Americans Back Real Estate

Real Estate Investment

For those of you looking to purchase a home, this poll can add some reassurance to your process. With inflation hitting 40+ year highs, there is reasons why savings accounts are decreasing in popularity and real estate is gaining market share. As pretty much everything else in terms of asset has lost value due to the Federal Reserve and inflation, real estate has remained strong and an outperformer. This is why more Americans back real estate than ever before. Owning a home is a powerful financial decision, and more now than ever are people realizing this.

Inflation And Homeownership

With inflation continuing to surprise to the upside, consumers are getting worried. However, real estate has traditionally acted as a hedge against inflation in the past. There has never been a time in history where protecting your purchasing power has been harder. With the prices of everything increasing monthly, and the cost to borrow money increasing as well, the consumer is getting squeezed. However, this is where real estate comes in as an inflation hedge. With locking in your mortgage rate, you are able to beat the next increase in borrowing costs that looks inevitable. And when buying your house, you are able to purchase a property before prices continue to increase. This allows you to lock in a monthly payment that could be below market value.

For those who are renting, you may not have the same benefits as homeowners do. Also, you are not protected from increasing in housing costs and monthly payment increases. Rents are rising, and have been since the moratorium ended last September. According to Danille Hale, chief economist at realtor.com:

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

Inflation and Home Prices

Inflation and home prices show at least a slight correlation, at a minimum. In fact, as more Americans back real estate than ever before, it is likely attributed to their ability to hedge against inflation. Not only is homeownership an inflation hedge, but it also allows you to build equity, aka net worth. More people than ever have benefitted from equity increases, and this could lead to why we saw a record high number of people backing housing. According to Mark Cussen, a financial writer for Investopedia, said this:

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

With home values rising at record levels, this is helping to increase your equity and net worth. Homeownership is likely the best hedge against inflation. Real estate will likely remain popular amongst Americans unless something unpredictable happens in the real estate market. Until then, expect to see even more Americans back real estate in the coming years.