Real Estate Remains A Great Investment Compared To Stocks

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Peoples Home Equity informs readers that real estate has outperformed stock returns over the past 14 years and that it remains a great investment for the long run.

The great 19th century steel building industrialist Andrew Carnegie once said "90% of millionaires became so through owning real estate." Someone reading this quote may beg-the-differ when looking at how stock prices have compared to investing in property over the past 14 years. However, Peoples Home Equity discusses why investors should look at housing as a stable, tangible, and safe investment especially now.

By referencing the S&P500 index, stocks have given a return of 17.01% from June 1999 to June 2013. Meanwhile, by referencing the S&P/Case-Schiller National Home Price Index real estate prices have risen 54.42% over the same period.

To further emphasize real estates out performance of stocks we can look at the number of times property values increased annually from from June 1999 to June 2013, a 14 year period. The national home prices index increased annually 10 years out of 14 with an average annual return of 4% while the S&P500 stock index increased 9 times annually at an average of 0.2%

The discrepancy in returns between the S&P500 and real estate prices is profound because stock prices have a historically more volatile than real estate prices. More volatility attracts investors to stocks because of the higher potential returns rewarded for a higher risk appetite. However, as the data shows, housing has greatly outperformed the overall stock market index.    

Investing in property should attract more buyers because the declines are typically less severe than stocks. Real Estate is also safer than ever thanks to new regulations placing strict credit standard on individuals before they can qualify for a mortgage. These new regulations are in place to help avoid another housing debacle as seen in 2007-2008.

To get started on investing in a home using a mortgage, consider Peoples Home Equity. Peoples Home Equity offers a wide range of lending options on their newly designed website. Their "Compare All Loans" sub-tab of "loan options" displays all 8 of their loan options. The website also offers numerous loan calculators to help in case an investor is not sure they can afford the monthly payment of an additional property.

With multiple locations spread across America find a People Home Equity branch nearest you by clicking here.

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