Consumer sentiment experienced a second consecutive month of decline this month, per the University of Michigan’s closely watched survey of consumers.
Consumer sentiment went from 58.2 in August to 55.1 in September, a 5.3% drop. In July, consumer sentiment was 61.7—showing two months of straight decline.
Year-over-year, consumer sentiment is down 21.6%, from 70.3 in September 2024.
Joanne Hsu, director of the Surveys of Consumers at University of Michigan, noted that sentiment for consumers with larger stock holdings held steady in September, but decreased for those with smaller or no holdings.
“Nationally, not only did macroeconomic expectations fall, particularly for labor markets and business conditions, but personal expectations did as well, with a softening outlook for their own incomes and personal finances,” read Hsu’s report.
Additionally, sentiment decreased about 9% for Independents and 4% for Republicans, but increased for Democrats, according to the surveys.
“Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year,” Hsu noted. “Interviews this month highlight the fact that consumers feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets.”
Declines in consumer sentiment is typically a fair indicator of what real estate professionals are seeing on the ground.
According to our previous reporting, faltering consumer confidence can signal changes in household spending patterns, says Greg Willett, chief economist for LeaseLock.
“Whether or not households actually pull back on spending, uncertainty tends to make people put off major financial or lifestyle decisions. They simply freeze in place,” he adds. “This suggests that the number of home-buying prospects will be somewhat fewer than was perhaps anticipated a bit earlier.”
For the full report, click here.
