According to the Reuters/University of Michigan Surveys of Consumers, confidence fell in August to 63.2 from a July reading of 66.
Additionally, the measure of consumer expectations fell to 62.1, the lowest reading since March.
The reason these numbers are somewhat alarming is because not only has the pace of job losses slowed, but the stock market has rallied nearly 45% from March. And yet the confidence and expectations of the consumer remain weak.
Remember, in March, according to the Bureau of Labor Statistics, we saw 652,000 jobs lost. As recently as July there were "only" 247,000.
It is possible that this decline in consumer confidence may be being reflected in the mortgage purchase application index of the past couple of weeks. As I have been following, the weekly mortgage purchase application index has remained below 270 for five consecutive weeks. This is an indication that demand for real estate may be slowing down. Mortgage purchase applications are typically an indicator of future demand for real estate.
If this decline in consumer confidence and mortgage purchase applications continue, it could further complicate efforts towards a housing recovery.