Unlike most people think, research shows that Americans like to invest in real estates than stocks

Which is the better investment, owning a home or owning stocks? If you ask most Americans, chances are they prefer the former.

Source: MarketWatch

A new study by the Federal Reserve Bank of New York examined consumer preferences for becoming a homeowner and how their attitudes have changed during the COVID-19 pandemic. Participants in the study were asked to assess whether financial assets such as housing or stocks were better investments and what factors contributed to their choice.
According to the survey, more than 90% of respondents preferred to own their primary home rather than invest in the stock market. The majority of the surveyed people also supported the idea of ​​becoming a landlord to buy stock, and more than 50% of participating households preferred to own a rental property.
The most common reasons people cited in choosing to house over stocks seemed to be about comfort and stability, rather than seeking a better return. The most commonly-selected responses were that the home was their “desired living environment” and “provides stability” and that house prices were “less volatile.”

Source: MarketWatch

Research has shown that residential real-estate has acted as a strong hedge in most bear markets, with the notable exception of the Great Recession. The early days of the pandemic is a prime example: The S&P 500 index SPX, +1.17% lost over 20% in the first quarter, while the Case-Shiller National Home Price Index increased 1.4%. That stock market has, of course, recovered since then.
In other words, compared with the previous year, Americans are more likely to believe that the rate of return on housing in 2021 is higher, which may reflect the rapid appreciation of housing prices across the country.
But the researchers found that people's attitudes towards the real estate market have changed during the pandemic. The authors of the study stated: “Preference for housing declined in October 2020 and will return to pre-COVID levels in February 2021.”
This shift in preference from housing is not driven by concerns about housing prices. Some Americans have expressed more concerns about the risks of vacant rental units, and concerns about being able to pay for mortgages may have affected people's preference for homeownership.
People’s inclination toward owning a home may also be a reflection of their gender or education. Women were more likely to prefer housing than men, and non-college graduates opted for homeownership more often than those with college diplomas.