How are consumers feeling overall, and how does that translate to a real estate sale? The question is multifaceted, but asking it could be key to learning where buyers stand as the election fast approaches.
The consumer sentiment index indicated yet another rise, for the third consecutive month, per the University of Michigan’s survey of consumers.
The index showed a 70.5 final October reading, up 0.6% from 70.1 in September. This graded slightly above economists’ projections as reported by Reuters, and followed increases in both September and August.
Survey of Consumers Director Joanne Hsu stated that “sentiment is now more than 40% above the June 2022 trough,” which shows a recovery in the long term, while the short-term prognosis this year was more bleak. The index declined off of an increase in February, and kept going for five months from there, until reversing course in August.
The year began on a high note for consumers, with a surge in the index in January following another increase in December of last year. The index shows a recovery in the medium term as well, with a 10.5% growth from this point last year.
Hsu explained that the increase in sentiment can be attributed to the aggregation of consumer sentiments in relation to their political affiliations and resultant economic expectations as expressed by those affiliations.
“The upcoming election looms large over consumer expectations. Overall, the share of consumers expecting a Harris presidency fell from 63% last month to 57% in October. Sentiment of Republicans, who believe that a Trump presidency would be better for the economy, rose 8% on growing confidence that their preferred candidate would be the next president. In contrast, sentiment declined 1% for Democrats,” Hsu said.
Although the presidential election may not be the be-all end-all for the housing market, Hsu expects it to play a role in the index moving forward.
“Regardless of the eventual winner, a sizable share of consumers will likely update their economic expectations based on the results of the election,” she said.
To view the full report, click here.
