Consumers expressed increasing confidence in the U.S. economy in March but are still keeping a watchful eye on the housing market before they act.
This month, 5.9% of consumers intend to buy a home (new or existing) in the next six months, unchanged from February’s revised rate, but up 1.1 basis points year-over-year. Buyer hesitation is in part associated with the prevailing affordability problem, which results from a combination of low inventories and high prices in the home market.
Fewer consumers have a definite plan to buy either new or existing homes, and more of them are inclined to feel uncertain about new versus existing homes. Only 0.7% of respondents say they'll buy a new home in the next six months, compared to a revised 1.1% in February. Potential buyers of pre-owned homes, the most popular option, dropped to 2.5% this month, the lowest point since November 2014. In the meantime, 2.7% of consumers say they've not decided on either, the highest rate spotted in 16 months.
The Conference Board's consumer confidence index bounced to a reading of 96.2, a 2.2-point increase month-over-month but a 5.2-point drop year-over-year.
“Consumer confidence increased in March, after declining in February,” said Lynn Franco, Director of Economic Indicators at The Conference Board, in a statement. “Consumers’ assessment of current conditions posted a moderate decline, while expectations regarding the short term turned more favorable as last month’s turmoil in the financial markets appears to have abated. On balance, consumers do not foresee the economy gaining any significant momentum in the near term, nor do they see it worsening.”
Consumers are more optimistic about the short-term outlook this month, as 15.0% of respondents believe that business conditions will improve in the next six months, compared to 14.5% a month ago. Those expecting business conditions to worsen decreased from 11.6% to 9.2%.
The monthly survey, based on a random sample, is conducted by Nielsen for the Conference Board.