Prudential Survey: Americans Are Increasingly Confident
Brookfield Real Estate and Relocation Affiliates Inc., owner of the Prudential Real Estate franchise network, today released the quarterly Prudential Real Estate Outlook Survey showing that Americans’ confidence in homeownership and real estate continues climbing from the first quarter and a year earlier.
Signs of growing confidence are widespread, according to the national survey. For instance:
- 69% believe that real estate is a good investment despite the market volatility of the past few years, up 6 percentage points from the first-quarter 2012 survey and 17 percentage points from first quarter 2011.
- 72% expressed confidence that the real estate market and property values will improve during the next two years, including a 6-point jump among those “very confident” or “confident” vs. the first quarter 2012, and a 14-point gain in this subset over first quarter 2011.
- Nearly two-thirds (64%) of respondents have a favorable perception of the U.S. housing market, up from 60% in first quarter 2012 and 52% in first quarter 2011).
“The American Dream is clearly on the mend,” said Earl Lee, president, Prudential Real Estate. “Americans are feeling better about homeownership and the ongoing recovery taking place in residential real estate. Many are increasingly optimistic about their personal circumstances and, with housing affordability near all-time highs, they want to act on the opportunity.”
Factors driving homeownership
Homeownership remains the central component to the American Dream, as 78% of respondents said owning a home was still “very important” – the same percentage reported in the first-quarter 2012 study. A full 98% said homeownership was at least somewhat important.
In addition, with interest rates at historically low levels, 96% of respondents at least “somewhat agree” that now is a great time to buy a home – the same percentage reported in the first-quarter 2012 study.
More than the financial reasons to buy a home, respondents placed higher priority on the emotional reasons for homeownership. “Control over living space,” “more space for family,” “safer neighborhood” and “good place to raise a family” rated higher than “a good investment,” “financial security” and “tax benefits.”
“Normalcy is returning to the U.S. real estate market and more people are buying homes for traditional reasons – to raise a family, feel secure and build a future,” said Lee. “Every last emotion is rolled up into owning a home – it’s where life happens – so it’s no surprise that the emotional side outweighs financial reasons for owning a home among respondents.”
The survey also shows that consumers remain cautious about the real estate market and process, as a full 30% “strongly agree” that the housing crisis reminds them to be more careful about buying or selling a home; up two percentage points from the first-quarter 2012 survey. In addition:
- Nearly two-thirds (65%) of respondents indicated that financing or getting a mortgage is more challenging than it was before the market crisis, which is up from 58% in the first-quarter 2012 survey.
- Among those considering a real estate transaction, 39% expressed concern they won’t be able to sell their current home, up 11 points from the first-quarter 2012 survey and 10 points from first quarter 2011.
- Given the dynamics and challenges of today’s real estate market, nearly three out of four (74%) respondents think it is more important than ever to work with a good real estate agent for the best success in buying or selling a home (up from 71% in first-quarter 2012 and 67% in first quarter 2011).
“Real estate markets are improving around the country and consumers face many choices,” concluded Lee. “Consumers should seek out a real estate professional who can help them make the best choices to suit their needs.”
Prudential Real Estate Outlook Survey Methodology
Interviews with 1,250 Americans who are “in the market” to buy or sell a home were conducted online by Palisades Media Ventures and Penn Schoen Berland, between May 22 and June 1, 2012. Respondents are aged 25-64 with a household income of at least $50,000, and either recently bought/sold a home or are considering buying/selling a home. The margin of error is +/- 2.8% for all respondents and higher for subgroups.