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Most Americans Believe Homeownership is a Solid Investment

The COVID-19 crisis caused widespread devastation to lives and the economy. As the country begins its gradual rebound, experts have noted emerging housing market trends that come as a result of the pandemic.

They also have pointed out that some seemingly pandemic-related effects existed prior to 2020, and analysts continue to anticipate what developments might be here to stay.

For the Fannie Mae Perspectives blog, VP and Deputy Chief Economist Mark Palim and Market Research Advisor, National Housing Survey Lead Rachel Zimmerman evaluated recent data related to recent patterns, consumers' attitudes and behaviors related to owning a home, and more. 

"We attribute much of housing's strength to the response of policymakers and consumers to the truly unique circumstances of the COVID-19 pandemic," they wrote. "Thus far, the pandemic has contributed to historically low mortgage rates, higher savings for many households, and even stronger demand for homes relative to supply, as many households searched for homes with additional features, including more space, home offices, and the ability to safely nest with their families."

Even before the pandemic, respondents to surveys expressed that they believed housing, as an asset class, was a safe investment with high potential.

The authors believe that even as pandemic-related factors recede, such attitudes will support housing demand for the long term.

As part of its Q4 2020 National Housing Survey, Fannie Mae analysts asked consumers about various investment types, including stocks, bonds, homes, and savings accounts.

Similar to earlier surveys, 75% of respondents indicated that homes rank in investment safety just slightly below a savings/money market account.

Additionally, 73% of consumers felt that investing in a home has "a lot of potential"—by comparison, 63% of consumers believe that stocks have "a lot of potential."


The authors concede that the idea of housing as a safe investment with high potential doesn't always "align with reality."

"Housing prices can experience steep declines or fluctuations depending on the holding period (see FHFA Home Price Appreciation Chart since 1991); the timeline of when someone buys and sells their home is an important factor in the overall return. Additionally, transaction costs are generally higher for housing than other assets. However, when comparing homeownership to other investments, consumers may be factoring in the rent they may otherwise have to pay, and for some consumers, the tax benefits of owning a home remain meaningful."

And the attractiveness of homeownership, for many, goes beyond monetary reasoning.

Ninety percent of consumers say owning a home "gives a sense of privacy and security;" and 89% say it allows for "a good place to raise your family," compared to renting a home. The reasons may vary, but the experiential aspects of owning a home likely play a role in its high perceived value, according to the Fannie Mae story.

Owning a home is also considered by most to be part of "the good life," with survey data showing that 87% of consumers report that owning a home is important for "the good life."

For context, other items ranking higher on "the good life" list included health, financial security, preferred living location, and work/life balance.

The full report is available at fanniemae.com.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media/Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others.

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