Concerns surrounding the Delta variant in early August dented consumer confidence while a slight rise in food prices also contributed towards the decline. The Conference Board reports that the Consumer Confidence Index fell to 113.8 in August from 125.1 in July. Spokesperson Lynn Franco said, "While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead."
Home prices continue to surge due in part to high demand and low inventories. The June S&P Case-Shiller National Index soared 18.6% annually, the largest year-over-year gain in the history of the index. The 20-City Index rose 19.1% annually. On a monthly basis, the National Index rose 2.2% while the 20-City Composite posted an increase of 2.0%. “June 2021 is the third consecutive month in which the growth rate of housing prices set a record, says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI.
The MBA reports that the number of loans in forbearance was essentially unchanged in the latest week 3.25%. The MBA says that there are 1.6 million homeowners in forbearance plans. The share of Fannie Mae and Freddie Mac loans stood at 1.66%. The share of Ginnie Mae loans in forbearance was unchanged at 3.92%. Mike Fratantoni, MBA's Senior Vice President and Chief Economist said, "We expect a sharp increase in forbearance exits over the next month as many borrowers reach the 18-month mark and see their forbearance plans end. For those borrowers who have exited in August, the majority either enter deferral plans or obtain modifications."
Consumer Confidence falls. Home prices continue to rise. Forbearance plans remain unchanged.
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