Consumer Confidence, A Key To Housing Market

October 1, 2009 · Print This Article

It’s true that consumer confidence is an important indicator of economic health of a country. Several factors influence the general public consumer confidence just as they do our individual confidence. Right now the greatest factor in confidence is income security… which starts with job security. While many people have taken a pay cut the real concern is a complete job loss. Until this fear is minimized the economy will continue to be unstable.

Caution, Remember To Think For Yourself!

The consumer confidence index looked great in August with a nearly seven point gain over July. In September the index fell just over a point. The talking heads will use this information to sell their “news” broadcast or paper. So, be careful not to be swayed by the negativity. The fact remains that since July consumer confidence has grown by over five points. That is important and is the real message that should be announced.

Holiday Season Shopping

This year’s holiday shopping numbers will be a great indicator of the real consumer confidence. It’s safe to expect that the spending numbers will not be greater than last year simply because so many people have lost their jobs since 2008. However, many people have also been re-hired and will spend money during the holidays.

What About The Housing Market?

The fact remains, when people fear for their income they are not likely to purchase big ticket items such as cars, boats, housing. Instead, then tend to make do with what they already have.

The Real Road To Economic Recovery

When more companies have a need for additional employees their existing employees will feel more secure with their jobs as will the new employees. Growing companies equal job security which leads to income security. That will boost consumer confidence and more people will start buying the big ticket items again. What is needed to start this trend could be the coming holiday season shopping. Regardless of how it compares to years before, the key is for people to start shopping again at a level they can afford. This demand will provide jobs and the ball starts rolling.towards economic recovery.

Don’t let the hype affect the actions you take! Be prudent in your spending and never buy more on credit than you can afford to pay off at the end of the month. If you do this then you don’t need to listen to the people who tell you how bad things are.

If you want to read more about the consumer confidence numbers and how they affect the real estate market visit the RIS site here.

Written by Mark Ramsey