Improving Local Economy Spurs Home-Price Growth and Positive Future Outlook

Opinions revealed from the 2018 CoreLogic Consumer Housing Sentiment Study

By Arthur Jobe Housing Affordability, Real Estate

Recently, CoreLogic partnered with RTi Research, a firm specializing in market research and brand strategy, to survey consumer attitudes toward homeownership. Through the survey, the 2018 CoreLogic Consumer Housing Sentiment Study, participants provided basic demographic information and responded to questions regarding financial status, current and previous housing, future housing preferences, and economic and housing market perceptions.

More than 3,000 people from urban, suburban and rural communities participated in the survey, representing nearly 2,500 zip codes and 432 major markets across the United States. 

The survey findings were combined with CoreLogic property insights sourced primarily from area home sales and valuations, CoreLogic Home Price Index (HPI) and MLS data to derive key insights about the attitudes of consumers.

Key Insights from Consumer Sentiment and CoreLogic HPI

In addition to learning about intentions and opinions regarding housing – where individuals look to live in the near future and why – the study revealed a relationship between changes in home price [1] and resident psychology and confidence.  In general, the likelihood of favorable attitudes followed home-price growth.

Impact of Local HPI Growth on Economic Perceptions

For example, when asked ‘Based on your personal situation, what is your perception of the local economy over the past 12 months?’, respondents living in high home-price growth [2] neighborhoods were far more likely to see the economy as having improved over the last 12 months than those living in areas with limited or no growth (see Figure 1).  

Perception of National EconomyOver 40 percent of participants living in neighborhoods with price growth also claimed that their home values made them more feel more positive about the current state of the national economy, as compared to only 30 percent living in areas with no growth.  Fifteen percent of participants in zip codes with stagnant or falling home prices reported that their home values made them feel less positive about the current state of the national economy, while only 5 percent of those living in areas with growth reported feeling less positive (see Figure 2).

Perception of Future Value of Current HomeRespondents in zip codes with some home-price growth were also more likely to be optimistic, reporting a belief that current home values would continue to rise during the next three years.  Those living in neighborhoods with no growth are more likely to perceive values as stagnating over time. (see Figure 3).

The strength of the local economy appears to be the underlying driver behind expected home-price growth and the perception of the national economy.  Personal situations improve, and home prices increase with a strengthened local economy, resulting in bolstered confidence and a healthier outlook.

Survey participants responded to questions in several areas related to housing: current housing type; satisfaction with property taxes, home and property size; most important aspects of a home; homeownership drawbacks; historical moving frequency and why; likelihood of moving and why – to name just a handful.  Market research has allowed us to better understand the minds of consumers, aggregate their thoughts and blend with property insights.  We expect to uncover more insights as we continue our study of consumer housing sentiment over the coming months.

Check back regularly to this Insights Blog page to see more survey results and thought leadership from the 2018 CoreLogic Consumer Housing Sentiment Study.

[1] HPI growth was measured as the average year-over-year growth rate in CoreLogic HPI by zip code across the four quarters in 2017.

[2] Respondents were separated into 3 HPI Growth Rate tiers: High HPI Growth (>6%), Low HPI Growth (>0% and <=6%), and No/Negative HPI Growth (<=0%).

 © 2018 CoreLogic, Inc. All rights reserved.