A key skill to being a real estate agent is judging a buyer’s mood. So how are consumers feeling on a wide scale?
Consumer sentiment dipped slightly in the early days of October 2024, from 70.1 to 68.9, per the latest report for the University of Michigan. This monthly change comes in below expectations; median projections for October were another slight increase to 71.
Despite this small month-over-month decline, sentiment is much higher (8% precisely) than it was in October 2023. The previous gains also haven’t been completely eroded. (When sentiment last fell in July, it reached 66.4.)
While pundits have broadly worried that global conflicts, including wars in Palestine, Ukraine and Lebanon, will weigh on consumer confidence, the survey found these concerns are potentially overstated.
“(F)ew consumers connected these developments to the economy. Concerns over these conflicts climbed this month but were relatively rare, mentioned spontaneously by less than 5% of consumers,” the report said.
Consumer expectations for the economy are in-line with sentiment; a slight decline (1.5%) month-over-month, but a noticeable increase (more than 10%) compared to October 2023.
Despite the lower than expected results, the University of Michigan’s Surveys of Consumers Director Joanne Hsu described the sentiment survey results as “within the margin of error.” Previous sentiment gains were helped by declining inflation and the Federal Reserve in turn cutting interest rates by 50 basis points.
The slight retreat in October is, per Hsu’s projections, driven by “frustration over high prices.” Indeed, consumers’ expected increase in prices over the next year had retreated during August (2.8) and September (2.7). In October, though, expected price gains again rose slightly to a projected 2.9—the same figure as during the last decline in July.
“Still, long run business conditions lifted to its highest reading in six months, while current and expected personal finances both softened slightly,” Hsu continued.
Hsu suggested with the election on the horizon, many consumers are refraining from making judgment about the long-term economy. That said, evidence suggests that the housing market is generally changed little by presidential elections.
For the full report, visit http://www.sca.isr.umich.edu/.
