According to an article by Reuters, "The Reuters/University of Michigan Surveys of Consumers said its final index of confidence climbed to 65.1 in April from 57.3 in March. That was the highest since September 2008 and the biggest one-month increase since October 2006." This is certainly good news as an economic recovery without the confidence of the consumer is not viable.
Part of this increased consumer confidence may be attributed to the fact that the stock market, which is no longer an economic indicator, has had a great month.
However, what is concerning is that housing activity, specifically mortgage purchase applications, have remained anemic during the month of April despite this surge in consumer confidence.
I have made the argument before, until the housing market gets price stability, the economy and banking system will experience significant headwinds. In other words, its the housing market, stupid. And in order for the housing market to get price stability we need to see a meaningful increase in demand so that we can get the excess inventory absorbed. Unfortunately, based on the mortgage purchase application index, we can expect to see continued depressed demand for real estate over the next couple of months.
Consumer confidence is fine, but it needs to translate into action and so far, in terms of real estate, broadly speaking, we are not seeing it.