Under the pressure of a plunging stock market and distressed labor market, consumers are cutting back plans to buy homes in the near future. According to a monthly release by the Conference Board, 4.8% of consumers surveyed have plans to buy a home within the next six months, the lowest level in the 10 months since last August. This is down 1.1 percentage points from the downward-revised 5.9% in May, and down 0.8 percentage point from June 2015. June's result came at a time when the future of the global economy is dampened by Britain's recent decision to exit the European Union.
Two components of potential home buyer confidence dropped a notch down in this month. Undecided consumers—those who intend to buy a home in the future but don’t know what type— dipped to 1.0%. Potential buyers for existing homes, in the meantime, dropped from 3.7% to this month's 2.5%. Those planning to buy new, however, increased from last month's 1.0% to 1.3%, the highest level in six months.
This month's consumer confidence index, a general gauge of consumers' economic outlook, rose to a score of 98.0 from a downwardly revised 92.4. This is the highest level since last October, but is still 1.8 points lower than June 2015. The improvement in consumer confidence reflects people's optimism regarding the short-term outlook, a relieving sign for the market.
“Consumers were less negative about current business and labor market conditions, but only moderately more positive, suggesting no deterioration in economic conditions, but no strengthening either,” said Lynn Franco, Director of Economic Indicators at The Conference Board, in a statement. " Expectations regarding business and labor market conditions, as well as personal income prospects, improved moderately. Overall, consumers remain cautiously optimistic about economic growth in the short-term."
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 >>
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