In February, more consumers held off plans to buy a home, as confidence in the U.S. economy plunged to a seven-month low, according to a report released by the Conference Board Tuesday morning.
A share of 5.3% of consumers had plans to buy a home (including both new and existing) in the following six months, compared to 7.4% in January, and 5.6% from a year earlier. The decline can be attributed to the shaky economy and plunging oil prices that put a question mark over the future financial market.
People are more inclined to buy existing homes when the economy seems less positive. About 2.5% of consumers say they hope to buy an existing home in the future, while only 1.1% hope to purchase a new home. About 1.7% of customers are uncertain about purchasing a new or existing home. Across the board, all three figures decreased month-over-month.
The Consumer Confidence Index dropped to a score of 92.2, the lowest point in seven months since August 2015, from a revised reading of 97.8 in January. It is also much lower than the reading of 98.8 a year earlier.
“Consumers’ assessment of current conditions weakened, primarily due to a less favorable assessment of business conditions. ” said Lynn Franco, Director of Economic Indicators at The Conference Board, in a statement. “Consumers’ short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labor market prospects. Continued turmoil in the financial markets may be rattling consumers, but their assessment of current conditions suggests the economy will continue to expand at a moderate pace in the near-term.”
Consumer confidence in business conditions also decreased in February--only 14.6% of respondents believe business conditions will improve over the next six months, compared to 15.9% in January 2016.
The monthly survey, based on a random sample, is conducted by Nielsen for the Conference Board.