Archive for the 'Consumer Confidence' Category
Existing Home Sales Plummet In July; Home Buyers Gain Leverage
August 26th, 2010 categories: Case-Shiller Index, Consumer Confidence, Existing Home Sales, Market Trends
The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®’ Existing Home Sales report.
It’s a drop of 27 percent from June; single-family home resales are at the report’s lowest levels since May 1999.
Furthermore, because of the sharp drop in sales volume, home inventories are spiking.
Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.
Home supply was just 8.9 months in June.
For home sellers in Maryville , the Existing Home Sales report is a bit of bad news. Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices. It may also increase time-on-market.
For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.
It helps that home affordability is up, too.
Although there’s reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today’s rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.
Mortgage rates are down 0.75 percent since mid-April.
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Falling Consumer Confidence Helps Drag Mortgage Rates Lower. For Now.
August 16th, 2010 categories: Consumer Confidence
For the second consecutive month, U.S. consumer confidence is plunging. July’s official reading is its lowest since July of last year and the figures run in stark contrast to just two months ago, when the index touched a multi-year high.
According to The Conference Board, July’s figures are reflective of a more pessimistic consumer; one concerned about “business conditions and the labor market”.
Falling confidence numbers are presumed to be poor for the economy. For homeowner and home buyers in Maryville , however, they can create opportunity. Low confidence can influence the mortgage market in a positive manner, driving mortgage rates down.
Mortgage rates are already at their lowest levels of all-time.
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Consumer Confidence Hints At Higher Home Prices And Higher Mortgage Rates, Too
June 2nd, 2010 categories: Consumer Confidence
The Consumer Confidence Index is rising, a potentially double-edged sword for residents of Farragut and for Americans, in general.
According to The Conference Board, economic confidence is as high as it’s been since August 2007 — 4 months before the start of the recession. Americans are optimistic again.
Confidence matters to the economy because as confidence increases, in theory, consumer spending follows. Consumer spending accounts for 70 percent of the U.S. economy.
It’s why Wall Street is responsive to confidence data.
When consumer confidence is rising, households start to make big-ticket purchases they may have otherwise put off indefinitely. Maybe it’s a replacing old appliances; or, trading in an old automobiles; or, splurging on a vacation.
Rising confidence can also spur real estate sales.
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