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Economic Outlook, Consumer Confidence, Mortgage Loans, Credit

I just have a few random thoughts this morning about what is happening right now in our economy. First of all, the election is over and win or lose for your candidate, get over it! We are all Americans, and America needs all of our help, not just the left or the right or the center.

That said, lets talk about one of the most troubling reports, at least for me, and that is Consumer Confidence. This report measures the level of confidence individual households have in the performance of our economy now and in the future. A couple of years ago, this number was in the 90s. Now, it has sunk to the lowest level I have ever seen, 38.0!

Experts are always making predictions of what some report or another and the prediction for this was 52.0, down from 61.4 the month before. Now, my definition of expert has to do with breaking it down to its parts, ex and spurt. Ex=has been and Spurt=drip under pressure. So, and Expert is a has been drip under pressure. In other words, with the negative news coming out every day from both campaigns about where were were headed, it is no wonder that the consumer confidence dropped like a rock. The only surprise is that the experts didn't see it coming.

Now, we need some good news. We need actual programs and plans that will work. We need Americans working together now. Let's hear more about the good and positive and less about the negative.

We have plenty of money to lend. That is good. We have programs in place to let people buy homes with very little or no money down. That is good. We have exceptionally low interest rates. That is good. Home prices are more affordable. That is good. There is a wide selection of homes on the market. That is good. There are fewer people in our business. That is good. (Sure the pie is smaller, but there are less of us getting a piece.) Lenders are starting to realize that ghost towns are not in their best interest either. That is good. Investors are out and looking for property again. That is good. The price of oil and the price of gasoline has dropped. That is good.

We have a system of government that provides for an orderly change in leadership. So, lets get going and do our job. I am confident in the American economy and my country. Who will join me in changing our consumer confidence. Enough of a soapbox for one day. Thanks for reading.

Authored by Fred Chamberlin, a mortgage loan consultant, Eugene/Springfield Oregon

Posted by Fred Chamberlin - Eugene/Springfield's #1 Experienced FHA Mortgage Consultant on 11/07/2008 03:03 AM

Comments (70)

Consumer Confidence in the Mortgage / Finance Channel

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Originally posted at: Fred's Mortgage Blog: Economic Outlook, Consumer Confidence, Mortgage Loans, Credit

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70 Comments on Economic Outlook, Consumer Confidence, Mortgage Loans, Credit

NOV

2008

Fred - I'm kind of digging your soapbox:) I prefer to rest my head in reality. Reality rarely is either all good or all bad. There's a plethora of opportunity in our country in any market, including this one.

Thank you my brother. There is good, there is bad. I am like the boy in the room full of horse manure looking for the pony. Take care Jason.

I'm with Jason. We need some truth to hold on to so we can plan for the future. It's a tough market and it will continue to be a tough market. There will be gradual changes, it wont be overnight.

Well, I loved your soapbox...at least you have an open mind and willing to work together. One thing for certain in my book ....my life is grand...no matter who is in office...no matter what's going on...because I choose to get up and do something about it a and not stay stuck in any closed minded judgements. Thanks Fred...I love to see when everyone is having a great day!

Carolyn - Reality is never all it is cracked up to be. Sometimes a bit of imagination helps to take the edge off. I know you experience that with your minions.

Sally - You bet, we have to be open minded and ready for what the day brings. I know it is a great day in paradise.

Another great post Fred. I think if we can all remember that these times seem to come in waves. I would like to think I have been riding out the worst and looking forward to the better times. The next step would be to prepare and positon ourselves so that the next worst wave that comes in the future , we are a little more prepared for. I plan to be.

You are a library of knowledge fred.

Cheers

Thanks Timothy, good advice to positon ourselves for the next wave....kind of like surfing, isn't it. Sally would know all about that.

Fred, I enjoy riding the positive train with you - it's certainly better than the leaky boat of negativity! But the thing I like best is that we have the privilege of going to work every day and helping people with the challenging process of buying and selling their homes.

I also like your definition of expert - did you come up with that on your own?

Best,
Bobby

You know Bobby, I am not sure where the definition came from, I think I got it from my father years and years and years ago. Still fits though, doesn't it. Yes, we are in a great business.

every day will give us the opportunity to make it a better world

You are right Thesa. It is up to us to make the most of our opportunities.

NOV

2008

Banks are just a little tight on guidelines right now. That is the only bad news that I'm dealing with. However, I did find out that we were just approved for a down payment assistance program today. So, that is good news.

You've got some great posts, Fred. I look forward to hearing more good news from you.

Kiss Kiss Fred...on with the show...the prosperity...the 3/4 FULL glass....and let be pink bubbly champagne for everyone !

I'm listening to Lawrence Summers as I read your blog. Yes, we surely need some good news but it's hard to find.

Fred: You make some wonderful points! Your MAIN point (I THINK) is that we need to ALL work together. RIGHT ON!!! This is our country.

My problem the past few days with "some" people HERE is when they SAY that Democrats ARE open minded (always), while Republicans, if WE voice our feelings, are CLOSED minded. This is very troubling to me. It should be troubling to all of us. That means WE, the Conservatives, should NOT be voicing our opinion or feelings, good or bad? HELLO! This is wrong, period.

But back to your main point, WORKING TOGETHER. We MUST!!! It's OUR Country we're working for! And WE ALL love it!

I hope to see lots of change. with the Dems controling all the government we should see what they can do and no excuses. The republicans had their chancein 94 and now it's the Democrats turn. I look forward to it with open arms, open mind and a open heart. It's time to rock this country and get moving. No excuses, with control no blame and no looking to the past. We need programs, help and we need money we have the control to print. No excuses that my motto.

Fred - well said !!! There are a lot of "good" things in your summary. Those points should be highlighted more by the media, reporters, and the like. In the meantime, since we are on the front lines, we can express those beliefs to consumers and cients. Eventually, people will swing from low or no confidence back to some level of confidence ! At that point, the economy will start to turn around. It is really amazing that a lot of the "crisis" is due to confidence. I know things are bad out there but there are still a lot of opportunites and a lot of folks doing quite well.

Fred - perhaps I am a cynic, but, I expect the news to be becoming more positive next year. Now, that doesn't mean that reality will be less negative or more positive, just that the news will reflect a more positive bias.

That being said, consumer confidence was high for years and the reporting was still mostly negative, regardless of reality. Confidence has finally started following reporting. I think it will take some time to recover, even more than the reality of it.

Yes, the price of oil and gasoline has dropped, significantly, but, that hasn't registered as good news yet, and, how many headlines do you see that reflect it. Will other prices drop to reflect declining fuel costs? If so, I expect that the only way we will know is that we will have a bit more left in checking.

Woke up to AR and and saw your smiling face on the front! Good Work! Great Job! And I like the message too!

Great post. Thanks for the information.

Great post Fred, and so very true on all fronts! I especially love your definition of "expert" too! I see so many good things starting to turn, and the uncertainty of the elections is now behind us.

I hate to say though- not trying to "rain" on all this optimism (pun intended)- I am concerned about job losses. Let's stay focused and stay productive in ALL we do. As Americans we will work our way out of this!

(edit- just saw the new jobs report and we really do need to keep an eye on this folks. From a local to a national level, support job growth and creation every way you can; and make sure your elected officials do too!)

Gerry Suarez, Jr.

Your FHA Loan Pro!

Hi Fred - Hurray we are all Americans and change will come if we all work together. Great definition about experts.

Fred, I was so excited when I logged into Active Rain this morning to see your smiling face at the top of the page that I started writing my comment with logging in first! Congratulations to you for being FEATURED - Great job to you and GREAT ARTICLE - Have a wonderful weekend!

Fred - Congrats on the Gold Star! I like how you broke down Ex-Spurt for us. LOL I agree with you that there are plenty of things positive right now, but the media would not be doing their job if they did not report the negative.

Fred,

I like your commnet about us all being Americans, regardless of who we voted for.

It is time now for all of to get back to work and to help the new President succeed.

American's are the greatest resource that this country has, let us all put oursevles to work for the better of the country.

There would have been change under either candidate as we make our through today's economic challenges. We don't make the market, we only work in it ... and for agents willing to put forth the effort, there is plenty of opportunity.

I love the positive optimism. It is the key to turning this nation around!

I love your ... that is good section. Consumers (and professionals) just don't know sometimes and with all the media pounding stuff in, it seems as we can't believe anybody. Always good to hear from an industry expert :-)

Fred -- I agree with your viewpoint! As an investor from the 1990's I remember thinking that 16% interest rates on investment property was great! Negative news always gets the headlines and we do need to examine the real facts for our area and realize that things really are quite good! (Of course us stagers always focus on the positive features of everything!)

Great confidence boost!

planning, planning, planning... a bit of stability in the markets will allow much more effective planning.

Hi Fred:

You absolutely correct and your post is so timely - We do need to bombard the media with local success stories - It is not all doom and gloom as the media makes it seem. As I type this is was just inspired by a theought to rally the troops in my local market - Thanks for the inspiration.!

YEAH FRED!!

You are right we need to work together and get over the election.

However these programs are going to take some time. I hope Pres.Elect Obama can funnel some money out to the banks, etc because I am finding a lot of them are being tight fisted. It s like it coming out of their own pockets. Understandable so mistakes have been made but the economy will not move without a flush of some of this money. You are on the right track though!!

Imagine my surprise in waking up and checking my e-mail to find out I had a gold star and people are resonating on my thoughts. Wow, my cup isn't half full, it is overflowing.

Mark- Thanks for the kind words about my posts. Excellent news about the DPA. We have that locally and it is a great help.

Sally - I am assuming the kisses came from you and not David. I always accept kisses. Thanks.

Diane - The good news is there, we need to dig and spread the message.

Kat - Good comment. We all need to listen to each other and then pull together as a team. The next few years will be interesting, if nothing else, and I hope it is a time of cooperation.

Charles - Is that your campaign slogan, "No Excuses!" Not a bad one. Forward, now looking back!

Christopher - Perception is more powerful that reality. People see what they expect to see. We need to drastically change perception.

Mike - Yes, we as a community, need to be cheerleaders for our areas. All real estate is local, well, so is all confidence. Keep reminding everyone you know that there are good things out there, look for them.

Eleanor - Was a surprise to me too. Thanks for being a loyal reader.

Brian - Thanks for the comment.

Gary - I too am concerned with the job losses. I really hope the new administration does some sort of infrastructure repair program. It will put a lot of people to work if done properly. Not a big believer in government programs, but this could be a win-win situation.

Lisa - Thanks, have always loved that definition myself.

Sandy - As one of my most loyal followers, I knew you would get a kick out of the feature. You found out about it before I did. It is really humbling to be chosen for this particular post. I am glad people are enjoying it.

John - I know the media has to report the negative, but they could also report the positive occasionally, if for nothing else, comic relief.

Mark - Right on, right on! Now is the time we can find out what we can do for our country, isn't it?

John N. - Opportunity is all around us, it is our job to reach out and use it. Change was inevitable, let's all make it for the better.

John H. - We have the key, now just turn on the lights so we can see the lock.

Steve - I appreciate you calling me an EX-SPURT. lol

Margaret - You should focus on the positive and work through the negative. I bought my first house at 10% and thought I was getting a hell of a deal.

Lily - Isn't that what we all need, now and again?

Paul - Planning is the key to any successful venture.

Gwenn - Great deal Gwenn, let us all know how that idea turns out. I know we will be happy to steal it if it works. LOL

Kathy - I also hope for some quick response from his transition team. Still, I know that we are in for a long pull and have my new shoes on so I can help.

One last comment in this batch. I was not a supporter of our President elect, but as he is now our President elect, he has my full support. The guy I voted for (as a matter of fact, most of them) lost, but that just means that I will work harder to do my part to make things work for the ones that won. Thanks everyone for your super comments.

i agree with you that we need positive results and stories but that is not going to happen with the media especially so long as a republican president is in office. The sad thing is, that if one went overseas and listened to the news you'd hear nothing but positive stories such as the ones you 're asking for. People there actually feel enlightened and uplifted after listening. Here, we feel depressed as we only hear how the world's economy is falling apart. Journalists need to learn a lesson there and focus less on writing stories for ratings. The optimist in me hopes that this trend will change soon. Perhaps once the political season is truly behind us, these same journalists will be able to write stories without bias so we learn the true facts on the nature of topics such as consumer confidence.

Great topic Fred, very thought provoking. Definetely feature worthy!!

That is one tall soapbox, did you stack them up! Excellent post Fred. I think it comes down to consumer confidence and trust. Many times I don't trust what I am hearing, so how does Joe Consumer trust it either... I keep telling buyers there is good money out there, inventory is up and prices have come down, still they keep looking because --- "there is something better out there"

Friends,

When I wake up My Day Started Off Great. Now this is all good, but remember it will be slow for a number of years. I say 2017ish it will be much better this is where the start of the up swing begains. Between now and then it will drop for a while longer then level with some small ups and downs. If it was like the other years it would be sooner but remember this is world wide and something we have never seen before. So work harder and smarter keep your customers happy they may not buy now but they will, the old rules are off it is time to invest in your business both time and cash.

Keep Your Head up try some new things, use the tools offered to you here try my site www.iwannatrade.com "A Better Market Place" check it out!! if you need more states and cities added I will add them just for you.

Hi Fred: It's always a game of checks and balances, the positives against the negatives. We're in a wild and rocky market right now, and your post is so timely. In fact, today is the day I am going to write my 2009 Real Estate Predictions. I'd like to say it's going to be pretty, but let's suffice it to say that I have to be honest. :(

There are silver linings, though. For example, Golden1 Credit Union in California is offering homeowners lines of credit at MINUS .5 under Prime. When was the last time you heard the term MINUS PRIME? That rate today is 3.5%.

Great Post and you are right there is alot that is good. Now we just need to spread that message

into our communities. I have seen a surge of business this week.

Thanks, Fred. I appreciate your positive post. We all know we're living in tough times right now and I'm not sure they'll improve much in the next few months. But eventually we will recover and it may be sooner than we think. Hang in there and keep spreading the good word about money to lend, etc. That part is true. Take care.

Nice article about the Economic outlook and thanks for the details ...

----------------

Gomez

http://www.widecircles.com

Fred, I enjoyed your positive outlook. Tough times create tremendous opportunity for the hard workers with drive.

Thanks Nathan or Evarard - We definitely need a turn around in the way things are reported. It would be nice to have some positive spin on things, now, not later.

Leslie - Trust is the easiest to lose and the hardest to gain. I am hoping for a change in attitude across the US and a change in attitude in our elected representatives.

Jon - I don't doubt that we will have slowness for some time to come. However, we have opportunities now to work with people and show them that there are positives out there. Keep looking though the manure until you find the pony. I am already a member of the network. Anything to make things work.

Elizabeth - You are right. When have you seen a line of credit at such a low amount. Wow! I look forward to your predictions. Honesty is always best and I already know you will be.

Sandy - That is fantastic news. Surge away!

Paul - You are quite welcome. Yes sir, money to lend....anyone looking for a quality lender? lol

Gomez - Thanks for your comment.

Darla - Tough times create tough people too. I won't be waiting for things to fall into my lap. I am out there.

Good to see some positive attitudes out there, we are definitely all in this together and the more postive we are the more positive everyone will be and this should bring consumer confidence up too!@

I think we all need to jump on the GOOD bandwagon. Wouldn't it be nice to have all your That is Good's on the front page of the local paper and on the news. Boy, it would help. It reminds me of the self-fullfilling prophecy. We are bombarded with negativity right now, so what does everyone feel? Yep, you guessed it, negativity. What if we started celebrating gas prices, and home prices leveling out and being more affordable, it would change a lot. I'm not saying there's not trouble out there, but there always is, how about a positive spin and a call for positive actions and feelings.

Thanks for your post, I have been saying this to my friends and people I meet, let's look at the good, and they are baffled when I point out all the positives right now.

Cheers,

Kim Darling

Good thoughts! I'm completely on board but would only add that we have got to stop listening to the doom & gloom presented by the press. It only exacerbates our current problems and prevents us from moving ahead!

Ken Eidenmiller, Broker/Trainer

Prudential Hickory Metro Real Estate

HickoryHomeBuyer.com

Hi Resident - You hit the nail on the head. We all need to stoke the fire so we can have more heat.

Kim - Good is Good. Good is all around us, so now is the time to look for it. Thanks Kim.

Ken - As a former newspaper editor in the Air Force, we only printed good news. What a change that would be today. I wonder what would happen if nothing but good was reported for a week? Something to think about, isn't it?

Thanks for the pep talk Fred. That was an impressive list of "Goods". Thank you for pointing them out!

The biggest problem is that even with the bailout commercial banks don't want to lend. Developers and builders aren't building anything and retail locations are going dark. I wish I knew the answer. Do you?

I agree whole heartedly. The conditions in today's market are great for buyers. Now we jsut need to get them to believe it.

Yes, the potential buyers out there are held up by 99% psychological roadblocks. "I think it's a bad time to buy", therefore it is, because no one buys and houses sit there forever, dropping prices further.

Everyone who runs into a potential buyer should make them go study Warren Buffet intensely. He became the richest man in the world by buying insvestments that were unsexy, unpopular, lame, boring, and, oh yeah, undervalued. He held on to them and guess what, the investment's $ value finally caught up to the actual value, the value that he perceived while it was still cheap.

If buyers recognized that they can negotiate a lower price than the house is actually worth, and that ability will not be around forever, they would buy in a minute.

Fred,

Congratulations on the feature. Can I have a few more days to get over the elections please? :)

Michelle

Terri - We need to look at the good now and again, otherwise all that is out there is depression.

Richard - Hopefully now that the election is over with we can get some good guidance to the banks and they will do what they are supposed to do.

Robert - If enough of us tell them, they will start believing. Talk to everyone you meet, in the market, in line at the theater, getting coffee, etc. What better way to get the word out than by word of mouth.

Tim - Great suggestion. Warren wasn't sitting on his Buffet tuffet, he was buying when that was the right thing to do. Now, is the right time to buy!

Thanks Michelle - Yes you can have time. You are passionate, that is what makes you good about what you do. We can all do with a little passion.

Fred,

Let me play devil's advocate for a second. How much of our economic woes do you think are based on a poor perception of the market and how much are based on facts and circumstances? (I've actually planned on writing about this but haven't gotten around to it.) Are people not buying homes/cars/taking a vacation today because the perception is that the market is bad, or because they simply can't do it?

Michelle

Michelle - As a loan officer, I know better than to give a direct answer, so I won't. I think that both are to blame because in all matters money, perception is greater than reality. If you perceive that things are bad, then they are. We need to change perception and it is so hard to do. It is like telling a stove to give us heat and then we will give it fuel. "Nothing is ever as good as it seems and nothing is ever as bad as it seems and somewhere inbetween lies reality" Casey Stingel.

Hi Fred!yeap, I agree with you, we voted, now we need to look forward!

Thank you for the "good news"... there are so many buyers sitting on the fence right now and are so fearful (thanks to the national media) and it is hard for them to feel confident about the GOOD things. Hopefully over the next few months things will pick up.

Mihaela - Yep, that is my reading also. Winner or loser, now is the time to join together.

Kerry - Tell them to jump off the fence and get on the bull.

Fred ... I'm sure things are going to take some time to balance out.. Not going to happen over night.. Great post

Fred.... the biggest gist to this all is the media..and those experts that give testimonial or info, that could go either way. It's like flipping the coin. My only problem with the statements above is that we don't have exceptional rates. We have very good rates. This is just my opinion. But a huge pet peeve of mine is like when we saw advertisements that said..." lowest rates __________" I can't remember what it exactly said at this moment. But the ads were misleading, making it sound like the rates were the lowest ever... when we have had lower rates before. Just my .02. Overall, some good info. I just believe in putting it out there in a format that doesn't sound like sales talk or semi misleading. It comes down to definining exceptional I guess.

jeff belonger

Fred -- great post ... even in tough economic times, which may challenge us for a while to come, we can adopt a positive attitude and work together to make the best of what we have. No more blaming, let's just join hands and look forward!

Roland - Not overnight but it is like drilling for oil, it won't happen if we don't start.

Jeff - It does come down to defining exceptional. When I bought my first home, it was at 10%. When I started in the business, it was 16%. Now we are at 6% +/- depending on the day. I call that exceptional. I do however agree with you about misleading advertising but that seems to be slacking off a lot with many of the crap people gone. There are still some, but not as many. No sale talk, just pep talk.

I hope it all gets better. Our Governator just announced a sales tax increase for all the state of California. This increase would make LA's sales tax at 10 and 1/4!!!

NOV

2008

Mana - Ouch, sure am sorry about that. Our sales tax is still at 0.0%

Fred... I agree... a good pep talk is always good... but with your example, then I could make the bold statement that today's war is much safer and better than that of War World War II.... but we really can't, because times were different. 20 years ago was a lot different and the economy was different. Even at 10% and 13%, things were more affordable all around... what about rates that were at 5%, fixed, for 30 years.... costing maybe a point to the consumer? I would call that exceptional. Hey, not trying to bust stones... just that I key on certain words and phrases... I have always tried to paint a more clearer picture for the consumer and my clients. Kind of like reverse psychology. Keep the pretty words out and be more direct... just my .02..

jeff belonger

Jeff - Well, I am not sure how we got to comparing rates to war, but maybe that is what we need, a rate war. Kind of like the gas wars we had when I was younger. LOL However, I don't think that positive statements are pretty words, and we will have to disagree as to whether or not current interest rates are exceptional.

Fred,

You said it. One area that has been overlooked recently is the availability of mortgage money because of the mess on Wall Street. There is plenty of it at very affordable interest rates, although guidelines are a bit stricter now.

Esko - And well they should be stricter. We were getting loans made that never should have, overreaction is part of the payback, I guess.

Fred,

I can honestly tell you that as someone who despises "pretty words" and the rah! rah! pep talk types of posts that this is NOT the way your post comes off at all. In fact if it were, I wouldn't have posted my comment about playing devil's advocate because I wouldn't have thought you'd have answered it honestly. There are plenty of others poster here on AR that post self-serving, sunshine and rainbow type messages no matter what the truth is. You are not one of them. Just my .02.

Michelle

Michelle - I appreciate your comments. I always try to be honest in my comments, as I know you do. Thanks again.

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