Consumer confidence rebounded to a score of 101.1 in August from July's revised 96.7, the first time the composite index broke through 100 after 10 months lingering around 90, the Conference Board reported Tuesday. The index remained 0.2 percentage points lower than in August 2015.
Moreover, 6.4% of consumers surveyed in August said they have plans to buy a home within the next six months, up 1.3 percentage points from July and two percentage-points from August 2015. The increases in these metrics could portend a continuation of the upswing in new home sales reported earlier this month by the Commerce Department amid declines in the resale market reported by the Naitonal Association of Realtors, which blamed the drop on a shortage of affordable inventory.
All three components of potential home buyer confidence moved up in the August survey. Potential buyers for new homes increased from July's 1.1% to 1.45% in August, while buyers contemplating resales increased from 3.1% to 3.5%. The biggest month-over-month growth took place among undecided consumers—those who intend to buy a home in the future but are not sure whether new or existing—as the rate increased from July's 0.9% to 1.5% in August.
“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers' assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months."
The monthly survey, based on a probability-design random sample, is conducted by Nielsen for the Conference Board.
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