Consumer Confidence Hit a Seven-Year High in October

Before the NWMLS data hits this week let’s check in on how Consumer Confidence and mortgage interest rates fared during October.

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

Consumer Confidence

The overall Consumer Confidence Index currently sits at 94.5, up 6 percent in a month and up 31 percent from a year ago.

At 93.7, the Present Situation Index increased 1 percent between September and October, and is up 29 percent from a year earlier. The Present Situation Index is currently up 364 percent from its December 2009 low point, but still down 32 percent from its pre-bust peak in July 2007.

The Expectations Index also rose in October, up 10 percent from September, and is up from a year earlier by 32 percent.

Here’s your chart of home mortgage 30-year interest rates via the Federal Reserve:

Mortgage Interest Rates

As of last week, the 30-year mortgage rate was at 3.98 percent, down slightly from the 4.14% level it has been averaging between late May and early October. Current interest rates are roughly on par with where they were in November 2011 and nearly two and a half points below the 6.41 percent 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.

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

14 comments:

  1. 1

    Other Data Shows

    “..Consumer spending slipped 0.2 percent in September, the Commerce Department reported Friday, the weakest performance since an identical decline in January. Income edged up 0.2 percent in September in the smallest monthly gain since a flat reading last December…..”

    “…Spending, which accounts for 70 percent of economic activity, has fallen only three times since the recession ended in 2009….”

    http://www.businessweek.com/ap/2014-10-31/us-consumer-spending-down-0-dot-2-percent-in-september

    And Fortune magazine tells us lower gas prices aren’t making consumers spend:

    http://fortune.com/2014/10/15/gasoline-retail-sales/

    Graphs can be hot air allegation graphs, but tracking recent actual dollars spent is cost data. Its worsening.

  2. 2
    Deerhawke says:

    Actually, this is something conservatives and pessimists have pulled out of an otherwise stellar economic report for the quarter. We sure wouldn’t want Obama and the Dems to get any credit for an improving economy, would we?

    It is a relatively small one-month change in consumer spending and it is very much subject to revision. If the change is real, it might be something as simple as what is driving today’s election– people say they are worried about Ebola and ISIS. Kind of nutty, given the other stuff to worry about, but maybe it is enough to keep people away from the shopping mall.

    From my perspective this so-called bad news is good news anyway. By definition, what is not consumption is savings. If people are not spending it at the mall, they are paying down debt left over from the recession or saving a bit more.

  3. 3

    RE: Deerhawke @ 2

    I Totally Agree With Your Last Paragraph

    On the need for all of us to hoard money, especially when our long-term CDs [locked in for like 10-30 years?] are 2% and Money Markets are closer to 0%. I hear the average retirement savings is $20K, that will last about a year if you live like a pauper. Or allow the Greenlake elderly population to squeak by on their reduced elderly property taxes and still eat, with only every other day without home heating this winter…

  4. 4
    Mike says:

    What we really need to send consumer confidence back up to 2007 levels is another widespread cash out of equity. I’m a little disappointed that 40% appreciation hasn’t opened the flood gates more than a dry dusty trickle. I though when I had that magic ‘quarter mil’ in equity lenders would be banging on my door to give me a lifestyle of unparalleled luxury. Hasn’t happened. Even my mortgage broker, who sends quarterly updates via automated post card, hasn’t even *hinted* at the possibility of cashing out my well earned ‘appreciation’. What is wrong with this country? Just a couple of years ago Mr and Mrs subprime would be offered the opportunity to cash out every last penny and then a few grand on top of that. Here I am, with equity, and nobody’s beating down my door to borrow against it?

    How are the doomsdayers going to get their $0.40 on the dollar buying opportunity in 2016 if people aren’t allowed to spend themselves into oblivion?

  5. 5
    Erik says:

    RE: Mike @ 4
    I cashed out my appreciation. A bird in the bag is worth 2 in the bush.

  6. 6

    RE: Erik @ 5

    Exactly Erik

    An increase in debt will temporarily put burgers on the table. But if your job salary decreases or goes away you’ll seriously regret it.

  7. 7
    wreckingbull says:

    RE: Mike @ 4 – Lending standards are still rather tight. If you want to talk loosey goosey, walk onto an auto lot. They will be happy to loan you all you need at subprime rates, for a ride you can’t afford. Can’t make the payment? Not to worry. They already installed an ignition interlock that will disable your car and leave it ready for the repo-man. Can’t get to work the next morning? That’s your problem now.

    Our nation’s poor are like pellet fuel, we just keep grinding them up, compressing them into tidy little tidbits, and then burning them for that cozy warm flame.

  8. 8

    Gas prices are based on supply and demand. That means the lower gas prices are the result of: (1) Increased supply; and/or (2) Lower demand (national and international). To the extent that the lower gas prices are due to #2, that is not good economic news.

    But if you want your economic analysis to only pass what is required to laugh at a joke on Letterman, or fill the head of a news anchor, go ahead and think otherwise. ;-)

  9. 9
    john says:

    RE: wreckingbull @ 7

    saddens me to see how we treat the less fortunate members of society. Taxes hit them by far the hardest and our policy of “go get a job you lazy bum” completely ignores the direction our economy has taken over the last 30 years.
    I have to wonder exactly which consumers are feeling confident? What is see is winner take all and a pipe dream sold to the losers.

  10. 10

    RE: john @ 9
    Exactly John

    Stagnant Total Labor Market in Seattle Bellevue Tacoma has mostly been around 1.9 million workers since the 2008 Great Recession. It did uptick about 50,000 end during the 2013 4th QTR and the 2014 1st QTR….but suddenly lost about 25,000 by the 3rd QTR this year….lower gas prices?

    How does the Seattle job market compare to the whole state of Kansas [we all assume its worse there, wrong]. The Kansas U3 unemployment is 4.8 versus our 5.1. The Total Labor Market for the whole state is about 1.5 million averaged since the Great Recession, albeit it shed 30,000 jobs since 2008, it gained 20,000 of ’em back this year….more jobs going to Kansas City soon too, the Big Three is building a new assembly plant there soon…versus our future, 30% of Boeing’s defense leaving Seattle.

    http://data.bls.gov/timeseries/LASST200000000000006?data_tool=XGtable

    No wonder there’s no traffic on Kansas City Freeways [empty and 70 mph during rush hour]….we have more people working and crammed on like 5% of the land space than the whole State of Kansas…..LOL, i.e., cheap real estate. I read recently Millenials are flocking there. With all the youth down there, my daughter has 10 times the friends there than she had here BTW.

    Amazon wants to cram 4 workers into a 1 BDRM apartment for $2200/mo and no car parking by Lake Union, no good grocery stores either. Subway? Slave labor in their warehouse too, I read recently.

  11. 11
    Shoeguy says:

    RE: wreckingbull @ 7 – Yea, I don’t know where Mike is getting his news. HELOCs are coming back and are at the highest level they’ve been since 2008. People are just as desperate to use their homes as ATMs as ever. You also brought up subprime car loans.

    People love their credit. Apparently we learned nothing last time.

    http://www.housingwire.com/articles/31650

  12. 12

    So just how indicative is the consumer confidence level of anything? It just means that consumers are confident. Weren’t they confident in 2007 and 2008 before the real estate market and stock market respectively crashed? Wasn’t the consumer confidence level high in 1929?
    I’m not suggesting that if the consumer confidence level is high, we’re about to have a crash. But I’m not seeing that it’s predictive of anything. Am I wrong?

  13. 13

    RE: Ira Sacharoff @ 12 – It is pretty useless, IMHO. It didn’t even predict the outcome of the elections in 2012.

    Maybe it’s supposed to be a contraindication?

  14. 14
    ChrisM says:

    RE: Ira Sacharoff @ 12 – I think consumer confidence is a very short-term predictor of consumer spending (particularly via credit card) and not much else.

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