Shoppers are coming back to the home-buying market in May, indicating a rising confidence in the U.S. housing market. Some 6% of consumers surveyed have plans to buy a home within the next six months, according to a monthly release by the Conference Board. This is a 0.7% gain from April's downward revision and also is 10 basis points higher than the rate of May 2015.
Approximately 0.9% of respondents opt to buy a new home in the future, unchanged from the rate of April. Undecided consumers—those who intend to buy a home in the future but don’t know what type— dipped 0.2% to 1.2% in May, while the number of people preferring pre-owned homes climbed 90 basis points to 3.9% in May, reflecting a rising competition in the existing home market.
The consumer confidence index, the general gauge of consumer market outlook, sank to a score of 92.6 from a upwardly revised score of 94.7 in the previous month. This is the lowest level since December 2015, and equals the low rate of November 2015, when the Federal Reserve's signal of a possible interest rate hike caused concerns about its impact on the economy. The decline in consumer confidence was mostly driven by people's less favorable perceptions of the current economic situation, for which the rate dropped 4.2 percentage points from April to May.
“Expectations declined further, as consumers remain cautious about the outlook for business and labor market conditions,” said Lynn Franco, Director of Economic Indicators at The Conference Board, in a statement. "Thus, they continue to expect little change in economic activity 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 >>