Consumer confidence dropped off in April more than analysts had expected it would after reaching a cycle high in March, CNBC reported, citing the latest figures from The Conference Board’s Consumer Confidence Index. The index stood at 120.3 in April compared to 125.6 in March and 116.1 in February.
Still, consumer outlook for the next six months is largely positive, though optimism about business conditions and employment and income growth has dampened somewhat.
Slightly fewer respondents said they planned to buy a home in April (5.8%) than said so in March (6.2%), although that figure has trended upward in recent years, according to the National Association of Home Builders’ analysis of the monthly report.
The latest new- and existing-home sales numbers support the continued optimism measured in this month’s Consumer Confidence Index, with new-home sales rising 5.8% from February to March and existing-home sales climbing 4.4% for the same period at the fastest pace in more than 10 years.
Strong activity in the remodeling sector also supports healthy levels of consumer optimism, with the NAHB's Q1 2017 Remodeling Market Index jumping five points from the prior quarter to a mark of 58, with growth in bids, committed work and backlogs projected. Eight in 10 homeowners plan to complete home improvement projects in the next 12 months and two-thirds say they plan to spend more on such projects this year than they did last year, according to a recent survey by HomeAdvisor.
When it comes to purchasing a home, however, consumers optimism may be waning. Fannie Mae's monthly Home Purchase Sentiment Index fell 3.8 percentage points in March after hitting a record high in February, with the share of respondents who said now is a good time to buy a home dropping 10 percentage points. The decline is largely driven by rising home prices and mortgage rates, though expectations of further rate growth could encourage those who can afford to buy now to do so sooner rather than later.
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