Santander US Survey Finds Middle-Income Consumers Bullish on Economy, Expect Their Finances to Improve This Year
- Expectations of a U.S. recession plummet 17 percentage points year over year and 12 percentage points since last quarter.
- Q4 survey found that 76% of households are optimistic their financial situation will be better this year.
- Cost of homeownership seen as a burden, as middle-income households embrace alternatives.
- Pent-up auto demand remains, as 1 in 3 middle-income consumers plan vehicle purchases in 2025.
Santander Holdings USA, Inc. ("Santander US") today announced new survey findings that show middle-income consumers are feeling optimistic about the economy and their own financial prospects in 2025. Expectations of a recession in the year ahead dropped 17 percentage points in the past year, while nearly two-thirds of middle-income households (64%) believe the job market will be stronger in 2025 and 6 in 10 expect inflation to improve. The bullishness on the economy is translating into consumer confidence in 2025, with 76% of middle-income households expecting their financial situations to improve and 74% believing they are on the right track.
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"The consumer enters 2025 increasingly optimistic with a sharp rise in confidence in the economy, supported by expectations for a stronger job market and lower inflation," said Tim Wennes, CEO of Santander US. "Our research has shown a resilient consumer over the past few years, as households make necessary tradeoffs and prudent financial decisions to navigate financial pressures. As optimism spreads among households, we hope to see this translate into prolonged economic growth and improved consumer outcomes."
While displaying great resilience, inflation has and continues to be the #1 obstacle to financial prosperity. In fact, most (85%) reported taking some action in Q4 to manage inflation, with a majority (53%) scaling back on retail spending. As a result of making tradeoffs, 3 in 4 middle-income households have remained current on their bills, and 9 in 10 made progress toward their financial prosperity in 2024. Looking forward, 95% plan to proactively improve their financial situation in 2025, including paying down debt (45%) and saving or investing more (44%).
The Q4 Santander US study, which builds upon previous research, assessed middle-income Americans' current financial state and future aspirations, with a focus on how current economic conditions have impacted their households. It also explored their financial relationships with previously identified drivers of prosperity.
The Shifting Relationship Between Homeownership and Prosperity
Homeownership affordability is the #1 reason middle-income Americans do not own a home, and less than 3 in 10 (29%) believe homeownership is a requirement to be financially prosperous. Alternatively, many renters are finding that it offers them more affordable options, and it provides them with more flexibility to pursue employment opportunities. Among those who have recently purchased a home (since March 2020), 73% have made spending cuts to keep up with the costs associated with owning a home, and 60% live paycheck to paycheck because of housing expenses. These outcomes were less common, 48% and 32%, respectively, among those who purchased their home prior to March 2020.
Pent-Up Demand for Vehicles Continues
Access to a vehicle remains essential to financial prosperity, with 81% saying it provides them flexibility in how and where they live, and the overwhelming majority (73%) relying on a vehicle to get to work. At the end of 2024, strong pent-up demand for vehicles remains with nearly half (45%) considering buying a vehicle this year and 1 in 3 intending to purchase. Many have already taken steps toward a vehicle purchase. Of those considering purchasing a vehicle in 2025, 65% have started researching options and 46% have already visited an auto dealership. Potential auto buyers indicate that decreases in cost of living and auto prices would be the biggest factors impacting the likelihood of making a vehicle purchase in 2025.
This research on financial prosperity, conducted by Morning Consult on behalf of Santander US, surveyed 2,213 Americans who are bank and/or financial services customers, ages 18-76. Survey participants are employed or looking for work, own/use at least one financial product and are the primary or shared decision-maker on household finances with household income in the "middle-income" range of ~$50,000 to $148,000. This Q4 study was conducted December 5 – 8, 2024. The interviews were conducted online, and the margin of error is +/- 2 percentage points for the total audience at a 95% confidence level. Percentages may not total 100 due to rounding. The data was weighted to target population proportions for a representative sample based on age, gender, ethnicity, region, and education.
The full report and more information about the Santander US survey is available here.
About Santander US
Santander Holdings USA, Inc. (SHUSA) is a wholly-owned subsidiary of Madrid-based Banco Santander, S.A. (NYSE:SAN) (Santander), recognized as one of the world's most admired companies by Fortune Magazine in 2024, with approximately 171 million customers in the U.S., Europe and Latin America. As the intermediate holding company for Santander's U.S. businesses, SHUSA is the parent company of financial companies with more than 11,800 employees, 4.5 million customers, and assets of over $165 billion for the fiscal year ended 2023. These include Santander Bank, N.A., Santander Consumer USA Holdings Inc., Banco Santander International, Santander Securities LLC, Santander US Capital Markets LLC and several other subsidiaries. Santander US is recognized as a top 10 auto lender and a top 10 multifamily bank lender, and has a growing wealth management business. For more information about Santander US, please visit www.santanderus.com.
Santander Bank, N.A. is a Member FDIC and a wholly owned subsidiary of Banco Santander, S.A. © 2025 Santander Bank, N.A. All rights reserved. Santander, Santander Bank, and the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners.
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