According to the September release by the Conference Board Tuesday morning, 5.1% of consumers surveyed have plans to buy a home within the next six months, a sharp drop compared to the 6.9% reported in August and 70 basis points lower than the 5.8% reported in September 2015.
Two of three components of potential home-buyer confidence took a hit in August. Only 0.6% of consumers said they had plans to buy a new home, down from August's 1.7%. Undecided consumers—those who intend to buy a home in the future but are not sure whether new or existing— also dipped from 1.8% to 1.0%. Resale markets were the only component that showed growth, albeit slight, rising from last month's 3.4% to 3.5% in September.
Despite the swoon in the home market, this month's consumer confidence index posted a strong growth to an eight-year-plus high of 104.1, compared to 101.8 in August and 102.6 in September 2015. The index is a general gauge of consumer economic outlook, and an increasing score reflects optimism regarding the short-term future of the economy.
“Consumer confidence increased in September for a second consecutive month and is now at its highest level since the recession,” said Lynn Franco, Director of Economic Indicators at The Conference Board, in a statement. "Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market. Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects. Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead."
The monthly survey, based on a probability-design random sample, is conducted by Nielsen for the Conference Board.
Read the full release on Conference Board here >>