Consumer Confidence Hits Its Lowest Point Since 2014
The Conference Board's Consumer Confidence Index fell 6.7 points in September, to 81.9, from 88.6 in August. It is the lowest reading since 2014.
The details are worth a look. The Expectations Index dropped to 63.6. The Present Situation Index stood at 109.3. Consumers, on average, expect inflation of 6.1% over the next 12 months. And 68.4% of them expect higher interest rates ahead.
That last number is the one I'd underline for anyone thinking about buying or selling. When most people expect rates to rise, they tend to get cautious about big, long-term commitments. A mortgage is the biggest one most people ever make.
The move-up buyer
The report also found that upper-middle-income households saw the steepest decline in confidence over the past six months. In Los Angeles, that matters. These are often the households trading up: from a condo to a house, from a starter home to something with another bedroom, from one neighborhood to the next. If this group hesitates, it can ripple through both sides of a move, because many of these buyers are also sellers.
A dose of perspective
One month is one month. Marketplace cautioned that a single reading could turn out to be an anomaly, and that is fair. Confidence surveys measure mood, and mood does not always match behavior. People who tell a pollster they're worried still buy homes when the right one comes along and the numbers work.
Still, I don't dismiss mood. In my experience, sentiment shows up in the little things first: a buyer who wants one more showing, a seller who becomes less flexible on price, a couple who decides to wait until spring.
What to do with it
If you are buying, get your financing conversation done early and know your real budget. If you are selling, price for the market you are in and not the one you remember. And if you are on the fence, talk to me about your own timeline, not the headline.
The national mood is shaky. Your plans should rest on your finances and your goals.
Source: The Conference Board, via PR Newswire and CNBC.
