Affluence is in the mind of the affluent. It doesn’t matter how the numbers on the assets line read. If you are concerned about your financial position, you are going to feel less affluent. Fortunately for designers, at the moment the affluent are feeling more affluent, and that means they are starting to think about purchases they have been putting off, like home remodeling.
Results from the American Affluence Research Center’s Spring 2014 Affluent Market Tracking Study show that the wealthiest 10 percent of American households are feeling more confident about their financial situation than they were last fall. Nearly half expect their net incomes to increase within the next year, and those who do are considerably more likely to be contemplating major purchases or expenditures, including home remodeling or the purchase of a primary residence or vacation home. Only about a third said they were planning to defer or reduce expenditures during the next twelve months.
Surprisingly, those sentiments are strongest among non-millionaire affluents, according to the Spectrem Group’s most recent monthly Affluent Household Outlook. While both millionaires and non-millionaires indicated concerns about the health of the overall economy and of their own companies, non-millionaire households were more likely to report gains in household income and household assets. In other words, millionaires are feeling less affluent because they have experienced some recent loss in income or assets, but non-millionaires are feeling more flush, because they recently realized an increase in their personal worth. What matters is not how big is the rock but the ebb and flow of the tide.
Keep that in mind as you begin to plan your marketing efforts for the post-vacation design season. Your best opportunity may not be the wealthiest prospect but the prospect who is feeling wealthy.