The percentage of Americans invested in the stock market has fallen for the fourth consecutive two-year period.   According to a Gallup poll, only 52% of Americans have money in stocks directly, through buying mutual funds, or as part of a retirement vehicle such as a 401K or individual retirement account (IRA).  

By contrast, real estate investing is increasing with sales and prices for houses continuing to soar across the United States.

In addition to the skyrocketing prices, confidence is increasing, too, across the housing market.  More buyers are optimistic enough to take on a 30-year mortgage.  Home builders are feeling better, with starts and permits rising.  Even those who supply kitchens, bathroom fixtures, and others components for housing are feeling much more confident too as the number buying advertising space at a major trade show has soared.  This confidence is well-placed as even if mortgage rates rise, the housing market will stay strong, as detailed by an article on this site.

“The Gallup poll does not surprise me at all,” commented Jerry Cohen, President and Founder of EquityBuild, a real estate firm.  Cohen, who has been a principal in more than 1000 transactions since 1984, advised that, “Over time, real estate has proven to be the best investment.  No matter what happens, the price of the property or level of rental income will rise eventually.”

He explained more as, “In good times, the price of housing will rise.  It is a simple matter of supply and demand.  Like now, more are buying so the price of the inventory rises.  It is that way for all asset classes, be it a house or share of stock for a publicly traded company.   What is taking place now is that more want to buy real estate and less want to buy stock, so the markets are falling for equities.”

When that happens, Cohen noted, “Rents will rise even if stocks and bonds collapse.  That is what happened during The Great Recession.  People were nervous about the economy and did not want to buy a house.  As a result, more rented.  From that, the level of rental income in the United States actually rose during The Great Recession.”

Shaun Cohen, the President of EquityBuild Finance, the funding arm of EquityBuild, added that, “More are investing in real estate than shows up as private mortgage notes are very hot.  A private mortgage note is when an investor lends the money to another party to buy real estate.  This form of high yield real estate investing can result in the double digit returns, so private mortgage notes are popular in periods of low interest rates, where we have been for years.”

The percentage of Americans invested in the stock market has fallen steadily since 2007, when it was 65%.  In 2009, it dropped to 57%.  By 2011, barely half the population, just 54%, owned stocks or mutual funds.  Now it is only 52%.