Boston Real Estate Investors Association

An increase in equity investment has led to a rise in the number of Americans investing in Real Estate Investment Trusts (REITs), with nearly 170 million individuals now involved in the market.

Increased Equity Investment Boosts Number of Americans Invested in REITs to Nearly 170 Million

A recent study by Nareit suggests that approximately 168 million Americans, representing about 50% of American households, were invested in REIT stocks in 2023. This number reflects a 12% increase from 2022, with more Americans getting involved in equity investing through various financial vehicles like mutual funds, ETFs, and target date funds.

The analysis is based on data from the Federal Reserve’s Survey of Consumer Finances, which provides insights into the financial status of American households. The latest estimate of Americans with REIT investments is derived from the percentage of Americans with any equity investments as reported in the 2022 survey. The impact of the pandemic on household finances has been significant, leading to changes in investment behavior.

The chart included in the analysis illustrates the trend of households with equity investments from 2001 to 2022. The share of households with equity investments has fluctuated over the years, with a noticeable increase in 2022 due to pandemic-related factors. The majority of households’ equity investments are held in tax-deferred retirement accounts, indicating a shift towards long-term investment strategies.

The study also highlights the growing number of Americans investing in REITs through retirement accounts, particularly target date funds. The popularity of target date funds has increased over the years, leading to a significant portion of Americans holding REIT investments through this financial vehicle.

Overall, the rise in equity investment post-pandemic has contributed to the increasing number of Americans investing in REITs. This trend is expected to continue in the coming years, with a potential regression towards the mean in future surveys.
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