Consumer confidence is up among affluent U.S. home buyers compared to last year, but they are still on the fence when it comes to big-ticket real estate purchases, according to the 2023 U.S. Residential Real Estate Study released earlier this week by WSJ Intelligence.
About 74% of the more than 2,200 respondents to the survey—who had an average age of 59 and an average net worth of about $4.76 million—say their family finances are better or have stayed the same as last year, the data showed. Meanwhile, 59% either have the same level of confidence or are more optimistic about the housing market than they were at the beginning of the year.
They’ve also benefited from rising house prices. The value of their primary residence has surged an average 14% to $1.45 million. Those respondents with a net worth of more than $10 million saw the value of their home rise an average 8% to $3.21 million, the survey showed.
Confident and armed with additional home equity, these wealthy individuals still expressed a number of concerns about buying a new home.
“Even our most financially secure readers aren’t bounding into the real estate market with confidence,” said Carolyn Romano, associate director of Luxury Lifestyle Intelligence at The Wall Street Journal. “They’re still holding back. They still have concerns around prices of homes; interest rates; inflation; low inventory; market performance. All of that is weighing in. So, even our readers who have the means to do so are still staying put.”
Indeed, the price of homes was the top concern for 71% of respondents, followed by interest rates (63%) and inflation (59%), the survey said.
Of those who do intend to buy a home, two in five buyers plan to move less than 25 miles from their current residence, while 27% have their sights on a destination that’s 500 or more miles from their current abode. In addition, nearly 40% of those who plan to buy said they will pay entirely in cash, the data showed.
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Across the board, the average budget for a new primary residence was more or less the same as last year at an average $1.78 million. By contrast, the wealthiest residents have upped their budgets a whopping 28% from a year ago to nearly $3.9 million.
Budgets for secondary or vacation homes are also significant, with buyers looking at a price point of at least $1.53 million, the figures showed. The South Atlantic region of the U.S.—which includes Florida, Georgia and the Carolinas—was the most popular destination, according to the survey.
Many second home buyers are using their properties as investments, according to Romano
“The younger cohorts are using them as an income-producing rental property,” she said. “It’s a financial play more than a vacation home.”
Overseas locales are also on readers’ minds, with half of respondents showing an interest in international markets. The largest number, 25%, were attracted to Europe, followed by the Caribbean (16%).
The Wall Street Journal and Mansion Global are both published by Dow Jones.
This article originally appeared on Mansion Global.
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