Spending Plans for Home Durables, Soft Among Affluent Households
In the coming year, the majority of the wealthiest ten-percent of American households are not likely to increase their spending for home durables, which include home furniture/furnishings, major home appliances, home computer equipment, and home entertainment equipment.
About half of these households say they expect to spend about the same on each of the four categories of home durables in the coming year as they did in the past year, and roughly a third say they expect to spend less. Only about 15% expect to spend more.
Looking at the Fall 2010 results of a twice-yearly survey of the most affluent American households by the American Affluence Research Center in Atlanta, Georgia, there appears to be a slight cutback from the increased spending plans associated with the evidence of "frugal fatigue" found in the Spring 2010 survey. However, spending plans for the home durables remain well above the lows established in the spring 2009 survey.
The Fall 2010 survey found respondents sixty years of age or older to be less likely than younger respondents to be planning purchases of home furniture and furnishings, but more likely to be planning purchases of major home appliances. Those age fifty to fifty-nine are most likely to be planning the purchase of home computer equipment, while those under fifty are most likely to be planning to buy home entertainment equipment. Plans to purchase major home appliances and home entertainment equipment are strongest among households with a net worth of six million dollars or more, while plans to buy home furniture and furnishings are strongest among households with net worth's of $1.5 to $5.9 million.
In contrast to those affluent households that made conscious efforts to reduce their expenditures over the past year or that plan to reduce their expenditures over the next twelve months, households that neither cut back last year nor plan to cut back in the coming year are more positively disposed to increase their spending in each of the home durables categories. Compared to their more cautious neighbors, these households have a 38% higher average income, 41% higher net worth, 77% higher investable assets and a much more positive outlook for the economy, the stock market and their personal income prospects for the coming year. Four out of ten affluent American households say they will make a conscious effort to generally reduce or defer expenditures over the next twelve months.
