66% of American Investors Favor Real Estate as Their Top Alternative to Stocks and Bonds

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  Published in Stocks and Investing on Tue, Nov 11th, 2025 by Moneywise

Why Two‑Thirds of Americans Are Turning to Real Estate for Alternative Investing

A recent Money Wise article highlights a striking trend: 66 % of American investors say real estate is a solid alternative to traditional stocks and bonds. The piece, based on a nationwide survey of more than 3,000 households, argues that the appeal of property‑based investments has never been stronger. Below, we unpack the findings, explore why real estate has become a favorite “alternative” option, and pull in context from the article’s linked resources to give you a complete picture of what’s driving this shift.

The Survey Snapshot

• Respondent pool: 3,212 adults from every U.S. state, representative in age, income, and education.
• Key question: “Do you consider real estate a good alternative investment?”
• Result: 2,131 (66 %) answered “Yes.”
• Comparators: Only 43 % saw commodities and 39 % saw private equity as reliable alternatives.

The article notes that the “alternative” label here does not exclude real estate from the investor’s broader portfolio; rather, it signals that many are seeking diversification beyond the stock market’s volatility and bond‑yield squeeze.

Why Real Estate Is Growing in Appeal

The Money Wise piece points to several factors that make real estate increasingly attractive to the average investor:

1. Inflation Hedge
   In an environment where the Consumer Price Index (CPI) has surged to a 15‑year high, real estate tends to keep pace—or even outpace—price levels. Rental income grows with inflation, and property values typically appreciate over time, offering a natural hedge against eroding purchasing power.

2. Tangible Asset with Passive Income
   Unlike equities, a property is a physical item you can see and touch. For many, that tangibility adds comfort. Moreover, rental streams can provide regular, predictable cash flow, especially in high‑demand metro markets.

3. Tax Advantages
   The article links to a Money Wise guide on “Real Estate Tax Benefits,” summarizing how depreciation, mortgage interest deductions, and 1031 exchanges can reduce taxable income and defer capital gains.

4. Diversification
   Real estate often moves independently of equity markets. When the S&P 500 takes a downturn, property values and rental yields can remain steady—or even rise if demand for housing is strong.

5. Low Correlation with Other Asset Classes
   The Money Wise survey found that respondents who own real estate report less portfolio volatility. The piece cites a 2023 study by the National Association of Realtors showing a correlation coefficient of just 0.18 between residential real estate returns and the Nasdaq composite.

Ways to Invest in Real Estate (and How the Survey Breaks Down)

The article doesn’t stop at stating the numbers; it dives into how most Americans are actually getting into real estate, and which avenues are trending.

The article references an in‑depth look at crowdfunding in another Money Wise feature, “Real‑Estate Crowdfunding for Beginners.” There, the author explains that these platforms often allow investors to start with as little as $500, spread risk across dozens of properties, and benefit from professional asset managers.

Market Trends Underpinning the Shift

• Rising Housing Prices: The article quotes the U.S. Census Bureau’s latest data, noting a 5.4 % increase in median home prices over the past year, signaling strong demand.
• Rental Growth: In major cities, rents have climbed 10‑12 % YoY, driven by a shortage of affordable units and a high renter‑to‑owner ratio.
• Interest Rates and Market Dynamics: While mortgage rates climbed to a 30‑year high of 7.5 % in early 2024, the article points out that for seasoned investors, the longer‑term yields on property—especially in high‑cap‑rate markets—outweigh the higher cost of borrowing.

The Money Wise article also links to a Bloomberg piece titled “Real Estate Resilience in a Rising‑Rate Economy,” which confirms that, historically, real estate outperformed bonds when rates are climbing.

Risks and Cautions

No investment is risk‑free, and the Money Wise article reminds readers that:

• Liquidity: Unlike stocks, real estate is not easily liquidated. Direct ownership can tie up capital for 5‑10 years.
• Local Market Variability: A booming city can turn into a slump if a major employer leaves; investors should study local fundamentals.
• Management Burden: Direct property ownership requires handling maintenance, tenant issues, and regulatory compliance—often outsourced to property managers at a cost.
• Regulatory Risk: Tax laws change; a 1031 exchange, for example, may become less advantageous if legislation shifts.

The linked “Real Estate Tax Benefits” guide warns that tax advantages can diminish if you sell before a 15‑year holding period or if you incur non‑qualifying repairs.

Bottom Line

The Money Wise article paints a picture of a growing confidence in real estate as an alternative investment—more so than any other asset class the survey looked at. With tangible assets, inflation protection, and potential for passive income, real estate is appealing to both seasoned investors and first‑time buyers looking for diversification beyond the volatility of stocks and bonds.

Whether you’re buying a rental property, investing in a REIT, or dabbling in crowdfunding, the article underscores that the “real‑estate boom” is not just hype. It’s grounded in solid data, supported by market trends, and validated by a broad segment of the American investor population.

Want to dive deeper? The Money Wise site hosts additional articles that flesh out each investment vehicle, including detailed guides on REITs, crowdfunding platforms, and tax strategies—making it a useful resource for anyone looking to turn that 66 % figure into a concrete portfolio decision.