March was another month of mixed results for consumer confidence. The Consumer Confidence Index increased after a falling in February. The Consumer Sentiment Index fell after increasing in February.
According to the Conference Board the Consumer Confidence Index jumped 4.0 points on a month-over-month seasonally adjusted basis in to 82.3. The rebound from February was attributed to improved expectations for economic conditions in the short-term. Consumers were more upbeat about jobs and the overall economy conditions, but remain less optimistic about income growth. Income growth remains a challenge for the housing industry moving forward, especially for first-time home buyers.
According to Thomson Reuters and the University of Michigan, the Consumer Sentiment Index fell in March by 1.6 points from the prior month. The drop was attributed to softening of the long-term economic outlook by consumers.
According to the Conference Board, the share of consumers planning to buy a home in the next 6 months was 5.5% on a seasonally adjusted 3-month moving average basis. The share of respondents planning to purchase a “lived-in” home was 3.4% on a seasonally adjusted 3-month moving average basis. The share of respondents planning to purchase a new home was 1.3% on a seasonally adjusted 3-month moving average basis. All measures were down from the prior month, but an improvement over one year ago.
An unusually cold winter may have attributed to another month of mixed result in measures of consumer confidence. However, unanswered questions remain about consumer confidence as it pertains to the housing market. In the upcoming year, interest rates and income growth will play an important role not only in the housing sector but also in the broader economic recovery.