Two reports out Wednesday reflect different takes on the US economy: Home sales fell in November for the 10th straight month but consumer confidence is on the rise.
Here are the details from the Associated Press:
Home sales decline again
Sales of previously occupied U.S. homes slowed for the tenth consecutive in November, constrained by a tight inventory of properties on the market and mortgage rates averaging more than double what they were a year ago.
Existing home sales fell 7.7% last month from October to a seasonally adjusted annual rate of 4.09 million, the National Association of Realtors said Wednesday. That’s lower than what economists had expected, according to FactSet.
Sales plunged 35.4% from November last year. Excluding the steep slowdown in sales that occurred in May 2020 at the start of the pandemic, sales are now at the slowest annual pace since October 2010, when the housing market was mired in a deep slump following the foreclosure crisis of the late 2000s.
Despite the slowdown, home prices continued to climb in November, though at a far smaller rate than just a few months ago. The national median home sales price rose 3.5% in November from a year earlier to $370,700.
The inventory of homes on the market declined for the fourth consecutive month. Some 1.14 million homes were on the market by the end of November. That amounts to a 3.3 months’ supply at the current sales pace.
Consumer confidence
The confidence of American consumers rebounded this month to end the year on a high note despite rising interest rates that have made credit cards and mortgages more expensive, and growing anxiety about a possible recession.
The Conference Board reported Wednesday that its consumer confidence index rose to 108.3 in December, up from 101.4 in November. It’s a sharp rebound, pushing the index to its highest level since April. Last month’s figure was the lowest since July.
The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — also rose, to 147.2 this month from 138.3 in November.
The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — rose to 82.4 from 76.7. Readings near or below 80 are associated with recession.
Getting a clear read on recent consumer behavior has been tricky.
The government reported last week that Americans cut back sharply on retail spending in November as the holiday shopping season began. High prices and rising interest rates are forcing families, particularly lower income households, to make harder decisions about what they buy.
