An April 1-21 Gallup poll found that more Americans rated real estate as a superior long-term investment than they have in previous years:
Gallup usually finds that Americans regard real estate as the best long-term investment among several options -- seeing it as superior to stocks, gold, savings accounts and bonds.
This year, 41% choose real estate as the best investment, up from 35% a year ago, with stocks a distant second. The 41% choosing real estate is the highest selecting any of the five investment options in the 11 years Gallup has asked this question. Gold peaked at 34% in 2011, while stocks did so in 2019, at 27%.
An earlier version of the question, asked between 2002 and 2012, did not include gold as an option. In that version, as many as 50% chose real estate as the best investment, in 2002, with between 26% and 37% choosing it in other years.
When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.
For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. That’s exactly what’s happening today. There aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.
If you’re already a homeowner, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have changed and you’re looking for something new.
If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a financial one too.
Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, work with a trusted real estate professional to explore your options and find out what steps you need to take next.