Real estate’s popularity as investment tumbles to 5-year low

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34% of Americans polled say property is the best place for their money.

May 16, 2023 at 7:28 a.m.

But real estate’s popularity took a steep fall. Its slice of the best-investment pie shrank from last year’s record high of 45% to a low not seen since 2018. That pullback in sentiment aligns with the property industry’s tough conditions – notably costlier financing, weak pricing and overall shaky economics.

Success in owning these types of investment properties has been up and down of late. There was a loss of 16% in total return – that’s price changes plus income – in the 12 months ending April, according to a key real estate investment trust index. But such large-scale properties produced a 9% return since February 2020, just before the pandemic upended the economy.Despite surging mortgage rates, U.S. home prices rose 5% in the past year and are up 40% in the pandemic era, according to Zillow.

 

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