Bitcoin vs. Real Estate: Which Is the Safer Investment?
Written by
Elizabeth Constantineau, AI Editor
Edited by
Elizabeth Constantineau
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In 2024, folks are exploring two major avenues for investing their money — bitcoin and real estate. Each option comes with its unique set of advantages and challenges. Simplifying the complexities can help determine which investment might be the safer bet for your finances this year. Read on for a straightforward comparison to guide your decision-making process.
The Real Estate Market Right Now
Buying a house has been tough lately. With mortgage rates hitting a peak in 2023 and home prices at record highs, the dream of owning a home has slipped away for many. But, there’s a glimmer of hope on the horizon for 2024.
Industry insiders are seeing signs that more homes might hit the market and loans could become a tad more affordable. The average 30-year fixed mortgage rate, which soared to nearly 7.79% last year, has begun to dip below 7%. Yet, with housing stock still low and demand high, buyers face an uphill battle as prices remain steep.
Despite a slight drop in mortgage rates, the median home price rocketed to $420,700 in 2023, underscoring the challenge of finding affordable homes due to scarce inventory. However, experts like Sam Khater from Freddie Mac suggest 2024 could be a brighter year for homebuyers. With the Federal Reserve pausing its rate hikes and hinting at potential cuts, mortgage rates could decrease further.
There’s a cautiously optimistic view for 2024, with potential for slightly better home affordability if mortgage rates keep falling and more homes become available. But, the expected surge in new listings may be slow to come, as many homeowners are holding onto their low-rate mortgages. The real estate market in 2024 will likely be shaped by this tension between easier financing conditions and the tight supply of homes.
For those looking to invest, or anyone considering entering the real estate market, 2024 may present unique opportunities, particularly for savvy investors who can navigate the challenges of the current market. This environment might be especially appealing to long-term investors and those capable of capitalizing on the gradual improvements in affordability and availability of properties.
Bitcoin’s Horizon in 2024
Bitcoin, on the other hand, has been riding a wave of euphoria, driven by institutional demand and the anticipation of its upcoming halving event in mid-April. Historical trends have shown significant price surges following past halvings, and many traders believe 2024 could see bitcoin reaching new heights, possibly surpassing its previous $69,000 peak.
The market’s buoyancy is further supported by the success of bitcoin ETFs, which have recorded unprecedented trading volumes, suggesting a strong market belief in bitcoin’s value stability around the $50,000 mark, with the potential to reach new peaks. Despite the optimistic outlook, investors remain wary of bitcoin’s inherent volatility and the speculative nature of its market movements.
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Bitcoin offers the chance for big rewards, but it’s not without its risks, especially with its well-known price swings and possible new regulations. It’s a reminder that if you’re thinking about jumping into the bitcoin world, it’s wise to proceed with caution.
Which Is Safer?
The question of whether bitcoin or real estate is the safer investment in 2024 doesn’t have a one-size-fits-all answer. It depends on individual risk tolerance, investment horizon and financial goals.
- For those seeking potential high returns and can stomach the volatility, bitcoin might be the more attractive option, especially with the halving event on the horizon.
- Conversely, real estate offers a tangible asset with historically steady appreciation and the possibility of rental income, suited for those prioritizing stability and long-term growth.
Final Take
Choosing between bitcoin and real estate depends on what kind of investor you are. If you like taking risks for the chance of a big reward, bitcoin might be your thing. But if you prefer something more stable that grows over time, real estate could be a better fit.
Remember, no investment is 100% safe, and it’s always a good idea to spread your money around in different types of investments to lower your risk. Before you decide, think about what works best for you and maybe talk to a financial advisor.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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