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When asked about the best investment for 10-plus years, 31% picked real estate with millennials the top pro-real estate generation. Only 20% preferred stocks.

NEW YORK – When it comes to how Americans prefer to invest long-term, real estate is still the most favored investment option – 31% said it’s their preferred way to invest money they wouldn’t need for more than 10 years, according to a poll by Bankrate.com.

While real estate has been among the top choices in each of the seven years of Bankrate polling, 31% is the highest percentage to date. The stock market was a distant second, at 20%, while cash investments such as savings accounts or CDs was a close third at 19%. Of the rest, 11% pointed to gold or other precious metals, 7% to bonds, and 4% to Bitcoin or other cryptocurrency.

Generations

Contrary to the stereotype about millennials and their propensity to not buy homes, adults age 23-38 prefer real estate more than any other generation (36%), and the age group with the highest preference for cash has shifted to baby boomers.

Overall, however, real estate was the top choice of all generations, including Gen X (ages 39-54 at 31%), baby boomers (ages 55-73 at 30%) and the Silent Generation (ages 74+ at 23%).

“Millennials are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than 10 years,” says Greg McBride, CFA, chief financial analyst for Bankrate.com. “Millennials in particular should be turning to the stock market for long-term investing, such as retirement.”

Income groups

The preference for real estate was virtually the same among all income groups, while households with income of $50,000 per year or more were more than twice as likely to cite the stock market than households with income below $50,000 per year. Lower income households (below $50,000 per year), do have a higher preference for cash investments and gold or other precious metals than households.

Before Federal Reserve Chairman Jerome Powell announced a cut in interest rates last month, Bankrate asked whether that would change behaviors. A majority said that lower interest rates will not make them more likely to invest in the stock market, borrow money, or put money into savings accounts or CDs: 40% said they would be more likely to put money in savings accounts or CDs as a result of declining interest rates. Only 33% said they would be more likely to invest in the stock market. Just 26% said they would be more likely to borrow money.

“A Fed interest rate cut is unlikely to influence how consumers manage their finances. Only a minority of Americans say they would save more, invest more, or borrow more as a result,” added McBride. “A rate cut or two is certainly not a reason for consumers to panic. The Fed raised rates nine times in a three- year period. If they walk back one or two of those, savers are still far ahead of where they were for much of the past decade.”

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