Consumer Confidence by Gallup

This is a follow up to a post I wrote in 2009, shortly after the consumer confidence had spiked from it's previous low of 53.  As you can see 2 years later, the consumer confidence of home buyers is hanging around 70% of people Gallup polled.  Looking back at the last 8 years tells a better story.  People were never more confident then in 2003.  Rates were low, banks were handing out loans, prices seemed to consistently be rising, even if only modestly in some areas of the US.  And then the entire market was pushed over the cliff in '06

So why have the last 3 years been nearly as high as 2005? 

• Have we stopped seeing foreclosures?
• Have the banks suddenly been lending money?
• Is employment the same rate as 2005?
• Have home prices been consistently rising since 2005?

None of the same trends from 2005 seem to exist, so why the confidence?

One reason and that is Affordability.

• Home prices reduced
• Household incomes
• Interest rates, century lows

Those who can buy, are experiencing this perfect storm that no one in 2005 was able to have.  2003-2005 confidence was there, because there was less fear. 

Today, you would agree, there is plenty of fear about our economy.  Sure, it's getting better.  Recovery is supposedly 2 years in the making.  But we are far from robust, and this recovery may never see robust.  Just like there were tiny recessions, we may only see a tiny recovery.

So, today's home buyer's have to deal with fear.  But, they are able to take advantage of unique factors that far over come their own fear.  And that is, home ownership, at remarkable affordability.  Home ownership, for nearly the same as their rents.  2nd time home buyers, matching the same price for their current home, and achieving much more house, for less payment.

For the complete story done by Gallup Poll click here.
www.gallup.com/poll/147248/Majority-Say-Good-Time-Buy-Home.aspx