Consumer confidence fell again in May, declining from 119.4 in April to 117.9 on the Conference Board’s Consumer Confidence Index, while still reflecting a positive economic outlook as home values, employment and wage growth all continue their upward trend, Bloomberg reported.
The drop-off could be a sign of waning confidence in the Trump administration and Congress to implement growth-minded fiscal measures.
Small decreases were also recorded in anticipation of better business conditions and job growth over the next six months. Despite the declines, confidence is measuring at historic highs, and economists say there’s no cause for concern, according to HousingWire.
The drop in consumer confidence was the second decline in as many months, following a cycle high of 125.6 in March. Still, the index remains above February levels.
Even with the slight dip, the May figure indicates continued enthusiasm for the direction of the economy, which should bode well for ongoing demand for new homes and remodeling investments.
Other indicators point to continued optimism, as well: Fannie Mae’s Home Purchase Sentiment Index increased in April, up 2.2 percentage points after declining in March. Within that survey, confidence in job stability increased, and more consumers reported significantly higher household incomes versus a year earlier.
Builder confidence levels remain well in positive territory, measuring 70 in May on the National Association of Home Builders/Wells Fargo Housing Market Index. That’s just below March’s 12-year high of 71 and besting analyst expectations, and it is ahead of the index’s breakeven threshold of 50.
The NAHB’s Remodeling Market Index climbed five points from Q4 2016 to a reading of 58 in Q1 2017, a level the association said demonstrates widespread confidence in the market. In fact, 80% of homeowners are expected to undertake home-improvement projects this year, according to HomeAdvisor.
Among potential homebuyers, particularly first-timers and those looking to trade up, however, rising home prices and climbing interest rates have them less optimistic. According to ValueInsured’s latest quarterly buyer survey, confidence persists but many respondents said it would have been more favorable to purchase a home six months ago.