Most Still Favor Home as Investment

By:: Peter King | April 26, 2011

The vast majority of Americans still believe that owning a home is the best investment someone can make, despite steep declines in housing values over the past five years.

A new study by the Pew Foundation found that 81 percent of Americans surveyed said that buying a home is the best long-term investment a person can make. That’s nearly identical to the 84 percent that gave the same answer to a similar survey 20 years ago.

The intensity of that belief has declined, however. Only 37 percent say “strongly agree” that a home is the best long-term investment, compared to 49 percent who held that view in 1991.

That’s not surprising, considering that national home values have fallen by nearly one-third since their peak in 2006, according to the Standard&Poor’s/Case Shiller Home Price Indices. But even among homeowners who said their own homes had lost since the start of the recession, 82 percent still agreed that home ownership is the best long-term investment (renters were somewhat more skeptical).

The study showed what may be an overoptimistic attitude among homeowners about the value of their own home – only 47 percent said they believe their property has fallen in value since the start of the recession, while 17 percent – roughly one in six – believe their home has appreciated.

Those whose homes have lost value don’t expect them to rebound soon. Eighty-six percent said they believe it will take at least three years for home values to recover, although only one in ten said they think it will take 10 years or more.

About one in four homeowners (23 percent) said they regret their decision to buy their present home, but few cited financial reasons for feeling that way. Among that 23 percent, six in 10 cited dissatisfaction with the home itself or its location. Fewer than one-third of those who regretted their purchase cited financial factors, with those nearly evenly divided between those who said their homes had lost value or failed to appreciate, and those who cited changes in the economy or their own financial situation.

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