The search for a new home is influenced by many factors including how consumers perceive the housing market, their financial well-being, and their ability to qualify. Given the importance of this set of consumer attitudes, Lifestory Research launched this year a new on-going program of research to track consumer sentiments that will be posted on the Lifestory Research Digest on a quarterly basis.

Unlike other national polls tracking consumer confidence, this line of research specifically surveys those that are actively shopping for a new home (as well as those that are not actively shopping for a home). By approaching consumers who are both actively shopping as well as those who are not, we will be able to track changes in consumer confidence based upon home shopping activity. Each wave of the research program surveys 1000 new home shoppers and 1000 people in the general population for a total sample size of 2000 adults. Data are weighted to produce a final sample that is representative of the general population of adults in the United States.

View of the EconomyHealth of US Economy Q1 2015

In this inaugural report we find that home shoppers have a much more optimistic view of the economy today as compared to those in the general population.  When asked about the health of the U.S. economy today, 49.3% of the home shoppers report positive sentiments (either ‘good’, ‘very good’ or ‘excellent’ sentiments) about the economy as compared to just 29.4% among the general population.

These perceptions may be based partly on how each group perceives their financial situation. The consumers were asked how they are managing financially and both home shoppers (43%) and those in the general population (45%) report that they are ‘doing okay’. But a much greater portion of the home shoppers appear to be better off, with 26.9% reporting that they are ‘living comfortably’ compared to just 12.5% among the general population. Still, it is worth noting that nearly one in three home shoppers express that they are struggling financially, with 21% reporting that they are ‘just getting by’ and 7.3% report that they are ‘finding it difficult to get by’.Personal Financial Condition Q1 2015

Looking forward to the health of the U.S. economy in 12 months, 38.9% of the home shoppers believe it will stay somewhat the same, and approximately the same percentage of the general population echo this sentiment. But home shoppers still stand out as the more optimistic of the two groups, with 37.3% reporting that they believe the economy will be better compared to 29.0% percent among the general population.

Employment status and job security can be among the factors that influence consumers’ outlook on the economy. Home shoppers tend to believe that their job is secure and that they are likely to see an increase in income in the next year.  That is, 51% of those shopping report that they think their income will increase in the next 12 months, compared to only 35% of people in the general population. Moreover, we found that many home shoppers (56%) are not at all concerned about losing their job in the next 12 months. This confidence in job security and rising income bodes well for the confidence new home shoppers have as they seek to purchase their next home.

View of the Housing Market ConditionsHome Shopper Perceptions Q1 2015

Asked about market conditions for buying and selling a home, 66.3% of the home shoppers give favorable ratings (reporting either ‘good’, ‘very good’ or ‘excellent’) for current purchasing conditions and 61.4% believe that now is a good time to sell a home. These numbers reflecting home shoppers’ generally favorable view of the housing market are consistent with their positive perception of the health of the U.S. economy, as well as their view of their employment security and personal finances.

Part of the reasons for home shopper’s confidence in buying a home is that most perceive that their current home has raised in value in the last two years (53%) or has at least remained the same in value (30%).

Among those looking to purchase a new home, many (50.7%) expect that home prices will go up over the next twelve months, with home shoppers as a group stating that they believe home prices will rise an average increase of about 7.68%. In recent research by Zillow, they found that consumers tend to underestimate the increase in house pricing.  However, based on many economic forecasts concerning house pricing, most predict that annual price increases in housing will be less than consumer estimates found in this research program.

Conclusions

Overall, home shoppers hold a relatively optimistic view of the economy and the housing market, indicating high home shopper confidence.  They generally hold a more favorable view of the U.S. economy and are more likely to report good housing market conditions as compared to those in the general population. Furthermore, a greater portion of home shoppers are employed and perceive themselves to be financially well-off. Taken together, these results predict positive signs for the housing market in the coming months.