Consumer Confidence Falls In August

Real Estate Broker/Owner

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.

Comments (4)

Terry Miller
Miller Homes Group - Tyler, TX
Miller Homes Group and Tyler Apartment Locator

No surprise in that, how do you plan for the future when our insane government officials seek to change the rules at every turn.

Aug 16, 2009 01:52 AM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

My confidence in the economy is skeptical at best. I see so many people that 2 years ago were prospering now loosing everything.

Aug 16, 2009 01:57 AM
John Mulkey - Waleska, GA
Housing Guru

Mark - It's difficult to have confidence when you're struggling to buy groceries or make your mortgage payment.

Aug 16, 2009 02:34 AM
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

I think this is really not bad in spite of the times we live in.  Jobs, a self serving politically run government that we cannot trust to do the right thing has a lot to do with this reading.  I blame Washington DC for all of this uncertainty!

Aug 17, 2009 02:52 AM