/Survey: Gen-Xers & Older Millennials Believe Stocks are a Better Investment than Real Estate

Survey: Gen-Xers & Older Millennials Believe Stocks are a Better Investment than Real Estate

35-44 year olds were hit hardest by the housing bust just as they reached prime first-time homebuying age

Less than half of homebuyers and sellers between the ages of 35 and 44 believe that real estate is a better long-term investment than the stock market, according to a survey Redfin commissioned in December of more than 2,600 people nationwide who bought or sold a home in the last year, attempted to do so, or have plans to buy or sell soon.

Buyers who reached the median first-time homebuyer age of 31 years old between 2008 and 2012 during the Great Recession and housing market collapse are now 38 to 42 years old. Redfin’s survey results show that this was the only age group that has less confidence in real estate as an investment than the stock market. Just 48 percent of homebuyers and sellers in this age group believe that real estate is a better long-term investment than the stock market.

Which is a better long-term investment?

“The oldest Millennials and youngest Gen-Xers entered their late twenties or early thirties during the housing crash, which explains why they are more skeptical about investing in real-estate,” said Redfin chief economist Daryl Fairweather. “This generation experienced a major setback during the housing bust, which hit just as they were most likely to be getting married, starting a family, and becoming a first time homeowner. Looking into the future, we expect to see homeownership increase as Millennials enter prime home-buying age. This is because Millennials have a more favorable opinion of real estate as an investment than Gen-Xers, and Millennials are a larger group than Gen-Xers.”

In every other age group, buyers and sellers who believe that real estate is a better long-term investment outnumbered those who believe the stock market is better.

This finding is surprising given that it comes from a survey of people specifically buying or selling homes, which is a group that presumably would be biased toward real estate to begin with. Younger Baby Boomers, respondents aged 55 to 64, were the most optimistic about real estate as an investment. Previous Redfin surveys of homebuyers and sellers have not asked this specific question, so we do not yet have any data on whether this has changed over time.


Methodology

Redfin contracted Qualtrics to field a study between November 2 and December 10, 2018 of 2,647 people from the general population who indicated they had bought or sold a home in the past year, tried to buy or sell a home in the past year or plan to do so this year.This report focused included data from the 1,784 people who answered the question: “Which do you believe is the better investment for those who do not plan to move their money in the long term, the stock market or real estate?” People who answered either “Real estate is the slightly better investment” or “Real estate is the better investment by far” were grouped together, and those who answered “The stock market is the slightly better investment” or “The stock market is the better investment by far” were grouped together.

The survey had respondents from all 50 states and Washington, D.C.

For more information about the survey and its findings, contact Redfin Journalist Services at press@redfin.com.