Consumer Confidence Flat, Rates Back to Mid-2011 Levels

Consumer Confidence Flat, Rates Back to Mid-2011 Levels

It’s time for another check in on Consumer Confidence. This time around I’m also going to throw in the latest home mortgage interest rate data, since the two are often somewhat related.

First up, here’s the Consumer Confidence data as of August:

Consumer Confidence

At 70.7, the Present Situation Index decreased 4% between July and August, but has gained 250% from its December 2009 low point. The Expectations Index rose slightly in August, gaining 3% from its July level.

Perhaps this slight dip is the result of increasing interest rates finally sinking in among the public. Here’s your chart of those rates:

Mortgage Interest Rates

As of last week, the 30-year mortgage rate was up to 4.57%, where it has been hovering for about three weeks. To give you some context on that number, current interest rates are roughly on par with where they were in June 2011, and still nearly two points below the 6.41% average rate during the height of the housing bubble through 2006.

Click below for the interactive Consumer Confidence chart (only works in Google Chrome).

You can use the sliders under the interactive chart below to zoom in on the data for a specific period.

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

7 comments:

  1. 1
    Blake says:

    Mortgage rout deepens:
    http://www.macrobusiness.com.au/2013/09/us-mortgage-rout-deepens/
    -snip- Mortgage applications decreased 13.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 6, 2013. This week’s results included an adjustment for the Labor Day holiday. …The Refinance Index decreased 20 percent from the previous week. The Refinance Index has fallen 71 percent from its recent peak the week of May 3, 2013 and is at the lowest level since June 2009.

    See also: http://www.nakedcapitalism.com/2013/09/wolf-richter-housing-bubble-in-full-bloom-zany-price-increases-and-now-a-sudden-slowdown.html
    -snip- Toxic Mix: Higher Prices and Higher Mortgage Rates
    Price increases that make the last bubble appear boring! So in San Francisco, the median list price, according to Redfin, is $832,000. The median sales price is 7.5% higher.

    Mortgage rates have jumped too. Combined with higher home prices, they make a toxic mix. So if our homebuyer in San Francisco pays $16,000 down on his median home and finances $816,000 for 30 years, with a fixed-rate mortgage at the average rate of 4.80%, the payment will set him back $4,281 a month.

    If the price on that unit was up 27%, it would have cost $655,000 a year ago. Back then, rates on equivalent mortgages were about 3.5%. With the same amount down, he would have financed $639,000. The payment would have been $2,736 a month. In the course of a year, for exactly the same unit, the mortgage payment jumped 55%.

    Insanity. Homes weren’t cheap last year either. Have incomes jumped 55% to make up for it? Um, no. In other cities, such as Las Vegas, it would be even worse. In other words, the new housing bubble has been beautifully inflated – and is approaching full bloom. Thank you halleluiah, Fed.

    Rate this comment: Thumb up 0

  2. 2
    corndogs says:

    RE: Blake @ 1 – In Russia, interest rates are 15% with 10% down required. A flat in Moscow is 500K and the average Joe makes 20K year. Home-ownership rate is higher in Russia than the US. Figure out how that is possible and than you’ll know more about what is going on in San Francisco and you’ll realize US housing is actually quite affordable.

    Rate this comment: Thumb up 0

  3. 3
    Matthew says:

    Wow.

    I think Cornholio takes the Meshugy award for the most asinine housing market comparison ever on SB. Comparing Russia to San Francisco as a reason for affordability in the U.S.?

    EPIC FAIL.

    Rate this comment: Thumb up 0

  4. 4
    Erik says:

    RE: corndogs @ 2RE: Matthew @ 3
    This battle has been a longtime coming. Corndogs thinks the market will remain relatively flat now. Matthew said “the tops is in” and you have been warned.” There is more tension here than just this last comment. You two need to settle this like men right here, right now.

    Rate this comment: Thumb up 0

  5. 5
    mike says:

    RE: Blake @ 1 – I’ll be the first to agree that the current appreciation rates aren’t sustainable, but I also don’t see any kind of bubble era catalyst that would cause prices to crater as soon as appreciation slows. I don’t get the impression that the last 18-24 months of unusual price increases was feeding into itself, which is one of the necessary components of a bubble. Home construction remained historically low, so there isn’t much evidence that the price increases caused over-investment this time around.

    One of the most important trends coincident with the price increases was the millions of underwater owners that moved back into the black and were able to sell at a profit – or at least break even. When appreciation slows, it’s highly likely that sale inventory of existing homes will also slow with maybe 12 months of lag.

    Rate this comment: Thumb up 0

  6. 6
    Jonness says:

    By Blake @ 1:

    Mortgage rout deepens:

    Meanwhile, the banks are in the process of loosening their lending standards to offset the loss of business.

    Rate this comment: Thumb up 0

  7. 7
    Ron says:

    RE: Matthew @ 3

    “I think Cornholio takes the Meshugy award for the most asinine housing market comparison ever on SB. Comparing Russia to San Francisco as a reason for affordability in the U.S.?”

    I would like to see the great corn-hole move to Russia and report back to SB. His insights from the front line would add greatly to our discussion here!

    Having lived in the bay area, it’s a total wreck in my view consider all that cement and congestion. But many like it. Seattle, on the other hand, has copious amounts of islands, mountains, progressive people….not to mention that we lead the nation in rent hikes….

    http://seattletimes.com/html/businesstechnology/2021724598_seattlerentsxml.html

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.