Prudential Real Estate just released its end-of-the-year Outlook
Survey, which shows that Millennials and Generation X place a higher
importance on, and hold more favorable views toward, home ownership than
older generations. According to the national survey, confidence
increased marginally among respondents with 73% at least somewhat
confident in the recovering real estate market and property values as
opposed to 72% in Q2. Additionally, “Contemplators,” survey participants
who considered but did not buy/sell a property during the past year,
displayed a 10% increase in confidence over Q2 figures for both the U.S.
real estate market and home prices indicating they will likely keep
their eye on the market.
“It’s no surprise that home ownership is still a very
important part of the American Dream for many people,” said Earl Lee,
chief executive officer at HSF Affiliates LLC. “On both a national and
local level, consumer confidence is returning to the real estate market
and there is an immense opportunity at hand for real estate agents to
develop new relations with a younger generation ready to invest in a
Key observations include:
- Home ownership remains important to 96% of Americans with 77% of
respondents ages 25-34 and 78% ages 35-44 indicating home ownership is
“very important.” More so, 74% of respondents agree that with interest
rates at historically low levels now is a great time to buy a home.
- Space, safety, and investment drive the reasons to own a home, with
97% respondents stating that home ownership allows for more control over
living space. Tax benefits finished a distant sixth on the survey’s
reasons for buying a home.
- 63% of Americans have a favorable or somewhat favorable perception
of the U.S. residential real estate market and, again, younger
generations are more likely to possess a favorable opinion when compared
to their older counterparts.
“We feel there are many contemplating real estate now,”
said Lee. “With interest rates near historic lows and prices in many
markets still well off their highs, owning a home remains a sound
long-term investments,” said Lee.
However, the survey also shows consumers remain cautious about real
estate process, with 62% of respondents stating that obtaining financing
is more challenging than it was pre-financial crisis. Given the
dynamics and challenges of the market, 72% feel that having a trusted
partner for the process is important, with younger generations being
most concerned about finding reliable sources of information.
“Millennials and Generation X–about 85 million people
strong–face a unique opportunity in U.S. housing,” adds Lee. “They are
generally optimistic about homeownership and, by nature, share a strong
sense of community. As important, many were not impacted by the real
estate downturn and are looking at today’s buying opportunities with
Prudential Real Estate Outlook Survey Methodology
Interviews with 5,000 Americans who are “in the market” to buy or
sell a home were conducted online by EdelmanBerland, between December
5-14, 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 ± 1.4% for all