Prudential study: Consumers ‘to jump off fence’ in 2014
Consumers are more committed to buying or selling this year, according to Prudential Real Estate’s fourth quarter Consumer Outlook Survey.
Of the 2,500 consumers surveyed, 78 percent held a favorable view of real estate, a five-point jump from the previous quarter and 15 points higher than at the end of 2012. Sixty-three percent said they were more committed to buying and selling in 2014.
One generation in particular is expected to jump off the fence and into the housing market: Millennials, defined as all persons born between 1980 and 2000. The generation peaked at 87 percent with a favorable perception of real estate in the latest survey.
“Consumers understand that the U.S. economy and residential real estate continue moving in positive directions,” says Earl Lee, CEO of HSF Affiliates LLC. “Accordingly, they’re feeling much better about their personal situations and want to take advantage of attractive home prices in many markets and interest rates that remain low by historical standards.”
However, two events in 2013 – the government sequestration and rising interest rates – have influenced their personal finance decisions, consumers say.
And while they’re optimistic, consumers are also realistic, believing that the rate of appreciation of U.S. home values will slow after a strong run in 2013. They say their No. 1 concern about the housing market is “decreasing home values,” followed by “saving enough for a down payment.” Respondents to the survey also say that tight housing inventories would likely impact their home-buying decisions this year, and 67 percent expect to face more buyer competition.