Americans’ Appetite for REITs Soars: A Look into the Growing Trend
Imagine this: you walk into a crowded room, and at least half of the people there have something in common – they’re all invested in Real Estate Investment Trusts (REITs). Surprising, right? Well, according to new research by Nareit, this scenario might not be far from reality. In 2023, an estimated 168 million Americans, equivalent to 50% of American households, had their money in REIT stocks – a 12% increase from the previous year.
This surge in REIT investments can be attributed to the overall rise in equity investing across the nation, especially through employer-sponsored retirement savings plans. The Federal Reserve’s triennial Survey of Consumer Finances provided the basis for this estimate, reflecting significant changes in American households’ financial behaviors post-pandemic.
While the share of households with equity investments has historically hovered around 51%, the pandemic-driven increase in savings led more families to venture into the equity market. This trend is especially evident in the realm of retirement accounts, where direct holdings of stocks and investments in target date funds have seen substantial growth.
The increasing popularity of target date funds, in particular, has reshaped the landscape of REIT investments. From 2001 to 2023, the share of Americans investing in REITs through target date funds has more than doubled, showcasing a shift in investment preferences and strategies.
As we anticipate the results of future surveys, it will be interesting to see if the current momentum in REIT investments is sustainable or if we will witness a regression toward the mean. One thing is clear: Americans’ appetite for REITs is on the rise, signaling a broader transformation in investment patterns and retirement planning strategies.
