Consumer Confidence Bounced Back in December

2023-01-03T10:14:51-06:00

By Fan-Yu Kuo on January 3, 2023 • Consumer confidence rose to an eight-month high in December as declining gas prices and easing inflation contributed to more optimistic views of economy. However, spending plans were mixed. Vacation intentions improved, while the intention to buy homes and big-ticket appliances cooled further due to elevated mortgage rates. This shift in consumer preference from goods to services is likely to continue in 2023. The Consumer Confidence Index, reported by the Conference Board, increased 6.9 points from 101.4 to 108.3 in December, the highest level since April 2022. The Present Situation Index rose 8.9 points from 138.3 to 147.2, and the Expectation Situation Index climbed 5.7 points from 76.7 to 82.43, the highest since February 2022. However, it’s still lingering around 80 – a level associated with a recession. Consumers’ assessment of current business conditions improved in December. The shares of respondents rating business conditions “good” rose by 1.2 percentage points to 19.0%, while those claiming business conditions “bad” fell by 3.5 percentage points to 20.1%. Meanwhile, consumers’ assessment of the labor market was also more favorable. The share of respondents reporting that jobs were “plentiful” increased by 2.6 percentage points, while those saw jobs as “hard to get” fell by 0.9 percentage points. Consumers were less pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve rose from 19.8% to 20.4%, while those expecting business conditions to deteriorate fell from 21.0% to 20.3%. Similarly, expectations of employment over the next six months were more positive. The share of respondents expecting “more jobs” increased by 1.0 percentage points to 19.5%, and those anticipating “fewer jobs” decreased by 2.9 percentage points to 18.3%. The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home fell slightly to 6.2% in December. The share of respondents planning to buy a newly constructed home marginally increased to 0.9%, while for those who planning to buy an existing home declined to 2.5%. Related ‹ Top Posts of 2022: Concrete Prices, Volatility Continue Torrid Pace as Lumber NormalizesTags: consumer confidence, home buying, mortgage rates

Consumer Confidence Bounced Back in December2023-01-03T10:14:51-06:00

Existing Home Sales Decline Further in November

2022-12-21T10:15:25-06:00

As rapid rising mortgage rates continue to weaken housing demand, the volume of existing home sales has declined for ten consecutive months as of November, according to the National Association of Realtors (NAR). This is the longest run of declines since 1999. While mortgage rates have retreated in recent weeks due to recession concerns, they are likely to see another up cycle in 2023. Additionally, home price appreciation slowed for the fifth month after reaching a record high of $413,800 in June. Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 7.7% to a seasonally adjusted annual rate of 4.09 million in November, the lowest pace since November 2010 with the exception of April and May 2020. On a year-over-year basis, sales were 35.4% lower than a year ago. The first-time buyer share stayed at 28% in November, unchanged from last month but up from 26% in November 2021. The November inventory level fell from 1.22 to 1.14 million units but was up 1.11 million from a year ago. At the current sales rate, November unsold inventory sits at a 3.3-month supply, same as last month but up from 2.1-months reading a year ago. Homes stayed on the market for an average of 24 days in November, up from 21 days in October and 18 days in November 2021. In November, 61% of homes sold were on the market for less than a month. The November all-cash sales share was 26% of transactions, identical to last month and up from 24% a year ago. The November median sales price of all existing homes was $370,700, up 3.5% from a year ago, representing the 129th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $321,600 in November was up 5.8% from a year ago. Geographically, sales in all four regions dropped in November, ranging from 5.6% in the Midwest to 12.5% in the West. On a year-over-year basis, all four regions saw a double-digit decline in sales, ranging from 28.4% in the Northeast to 45.7% in the West. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 4.6% from 80.8 to 77.1 in October. On a year-over-year basis, pending sales were 37.0% lower than a year ago per the NAR data. Related ‹ Single-Family Production Continues to Decline, Multifamily Permits WeakeningTags: Existing Home Sales, inventory, mortgage rates, pending home sales index

Existing Home Sales Decline Further in November2022-12-21T10:15:25-06:00
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