The Conference Board released updated consumer confidence data today including revisions to March and initial data on April. The numbers continue to support the thesis that consumers are gaining confidence and expressing intent to buy homes this year.
The data offered something for bulls and bears to highlight, but I would argue the key points in context are all positive. Contrast that with what you see and hear in mainstream media. The March index was revised up 2 percent to 83.9, the highest reading since 2008. The initial April number was 82.3, a 2 percent decline to the originally reported March number. Economists had been expecting a 1 percent increase.
The monthly series is inherently noisy, showing significant month-to-month variation with likely revisions, so what matters most is the longer-term trend. On that front, confidence is clearly getting better and better and is now challenging highs last seen before the Great Recession began. In other words, consumers have been getting more and more confident and this spring is the best we’ve seen in 6 years.
Also, the broader media rarely cover the metrics that the Conference Board tracks on plans to purchase a home. On that front, March was revised down slightly from 5.4 percent of households to 5.3 percent, and the April reading was 6 percent higher than March at 5.6. The April reading was the same last year, but the year-to-date average is higher this year than last.
This correlates well with NAR reported traffic at existing homes for sale and what we are seeing with traffic and sales at new home communities. Momentum is building as the U.S. wakes up from a brutal winter. This time last year was the peak of the activity and declines then started in May. Bet on the opposite this year—momentum will continue to rise—and thus we should see a higher new home sales rate than last year as the spring transitions into summer.