Americans Are Wrong to Think Their House Is a Good Long-Term Investment

Americans think real estate is the best long-term investment. They shouldn't.

David Hanson
David Hanson
Apr 27, 2014 at 8:29AM
Financials

According to a recent Gallup poll, nearly 30% of Americans believe real estate is the best long-term investment they can make -- choosing it over stocks, bonds, and gold. However, historical data show that housing prices, adjusted for inflation, are essentially flat and have been absolutely crushed by stocks. Stocks have produced annually returns of about 6% (adjusted for inflation).

In the following video, Motley Fool analysts Brendan Mathews and David Hanson tell viewers why housing is incorrectly seen as the greatest long-term investment option. Brendan notes that a home is usually a person's longest held investment, which gives them a better chance of long-term appreciation. Brendan argues that if Americans held stocks as long as they held houses, many more people would view stocks as the superior investments.