|
Consumer
Confidence
|
1ST
Release |
|
|
 |
| MOST
RECENT STATISTIC: |
47.7 |
|
|
| PERIOD
COVERED: |
October 2009 |
|
|
| Date
Released: |
10/27/09 |
|
|
| Next
Release: |
11/24/09 |
|
|
| Grade: |
F |
|
|
| Index: |
47.7 |
|
|
| Present
Situation: |
20.7 |
|
|
| Expectations: |
65.7 |
|
|
|
Analysis for the Housing Market
By:Ken Lee
The consumer confidence index fell to a reading of 47.7 in October from a revised September figure of 53.4. This is the second straight month that the index has declined and the lowest it has been since July. However, the consumer confidence index is up from its levels this time last year when the index stood at 38.8.
Both component indexes also declined in October. The present situation index dropped from the previous month to a reading of 20.7 from 23.0 last month. The present situation index is now back to its lowest levels since February 1983. The expectations index declined to 65.7 from 73.7 in the previous month. The expectations index fell to its lowest levels since July. Seven out of the nine regions in October posted monthly declines in the consumer confidence index. The East South Central region posted the largest monthly drop in consumer confidence, falling 20.4% from last month. The East North Central and Mountain regions were the only two regions to post monthly increases in the consumer confidence index, rising 24.14% and 22.98% respectively.
Sentiment regarding present business conditions and the present employment situation were more negative in October. Consumers' expectations of business conditions, employment, and income for the next six months were also more pessimistic than the previous month.
The number of people surveyed that plan to buy a home within the next 6 months declined to 2.3% from 2.5% while the portion that plans to buy a new home dropped to 0.3% from 0.6% in the previous month. With the homebuyer tax incentive set to expire at the end of November, demand for housing can be expected to drop off after the end of the program if it is not renewed.
Definitions and Importance for the Housing Market By:
By:Ken Lee
The Consumer Confidence Survey is a monthly measure of the public's confidence in the health of the U.S. economy, and is an important measure for the health of the housing markets. Because the index measures consumers' willingness to spend money (including buying a home), as well as their confidence in their future employment and income levels, it can be used to determine households' willingness to make a large investment in a home (down payment) and to assume the monthly payments of a mortgage.
The Consumer Confidence Index is based on a mail survey of 5,000 U.S. households, with a typical 70% response rate. The survey is taken during the first few weeks of every month, and different households are surveyed each month. There is an index for the United States overall, as well as an index for each of the nine major regions defined by the Census Bureau. There are also two subindices: Present Situation and Expectations. The Consumer Confidence Index is bench marked to 1985=100, and we consider an index above 100 to be a positive outlook for housing market conditions. Survey results are published monthly and are revised the following month once the surveys are analyzed more thoroughly. The survey is conducted for The Conference Board by NFO Research Inc., an NFO Worldwide Company (NYSE:NFO), based in Greenwich, Connecticut.
For more information on the Consumer Confidence Index, go to:
http://www.crc-conquest.org/
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