More potential home buyers are wary about the economic future, according to the October Consumer Confidence Index released by the Conference Board Tuesday morning. In October, 5.1% of consumers surveyed said they had plans to buy a home in the next six months ahead, down from the 5.9% reported in September. This is down from the estimate in October 2015, when the rate was 6.2%. Consumers are acting cautiously as this year’s unprecedentedly dramatic presidential election looms, which is causing anxiety about future economic growth.
Two of three components of the future home-buying index rose this month. A slight gain, from 0.7% to 0.8%, was logged in the new-home market, a signal that more consumers have plans to purchase a newly-constructed home than the previous month. Undecided consumers—those who intend to buy a home in the future but are not sure about new or existing—rose by 20 basis points to 1.6%. Pre-owned homes, on the other hand, appear to be losing ground among buyers, as potential resale buyers took a dip from September’s 3.8% to October’s 2.7%.
This month’s consumer confidence index mirrors the home-buying indices, falling to a five-month low of 98.6 after the downwardly-revised 20-month high of 103.5 this past September. The index, a general gauge of consumer economic outlook, suggests rising economic uncertainty.
“Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. ,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”
The monthly survey, based on a probability-design random sample, is conducted by Nielsen for the Conference Board.
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