Economic Snapshot: Consumer confidence highest since August 2007

Hopefully everyone has seen and will see the effects of consumer confidence’s 7.5-year high at boat shows. Paired with positive annual growth in new and existing home sales, opportunities are high for this to be a productive season. 

Consumer confidence 

Consumer confidence rose in January, now standing at 102.9. This is a large increase from 93.1 in December and is the highest level for the index since August 2007. The present situation index increased to from 99.9 to 112.6 and the expectations index increased to from 88.5 to 96.4.

Consumers who say business conditions are “good” increased to from 24.7 to 281. Percent while those who say business condition are “bad” decreased from 18.9 to 16.8 percent. Those who claim jobs are “plentiful” increased from 17.2 to 20.5 percent and those who claim jobs are “hard to get” decreased from 27.3 to 25.7 percent.

Consumers who expect business conditions to improve over the next six months grew from 17.8 to 18.4 percent and those whole expect business conditions to worsen declined from 9.9 to 7.7 percent.

The outlook for the labor market was equally optimistic. Those who anticipate more jobs in the coming months increased form 14.6 to 16.7 percent, while those who anticipate fewer jobs declined from 16.5 to `15.0 percent. Consumers expecting income growth improved from 16.2 to 20.0 percent but so did those who expect a decrease, from 10.2 to 11.3 percent.

New home sales

New home sales increased 11.6 percent in December to a seasonally adjusted annual rate of 481,000. This is 8.8 percent above the December 2013 estimate of 442,000 and the highest level of sales since December 2007.

The median sales price of new homes sold in December 2014 was $298,100 and the average sales price was $377,800. The seasonally adjusted estimate of new houses for sale was 219,000, representing a 5.5-month supply at the current sales rate. A supply of less than 6.0 months is the normal range.

An estimated 435,000 new homes were sold in 2014, 1.2 percent above the 2013 figure of 429,000. 

Existing home sales 

Existing home sales rose 2.4 percent to a seasonally adjusted annual rate of 5.04 million in December, 3.5 percent higher from the previous year and above year-over-year levels for the third consecutive month.

For all of 2014, there were 4.93 million sales, a 3.91 percent decline from 2013. The national median price for existing homes in 2014 was $208,500, the highest since it was $219,000 in 2007.

Total housing inventory dropped 1.1 percent this month to 1.85 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace. This is down from 5.1 months in November and unsold inventory is now 0.5 percent lower than the previous year.

The median existing-home price in December was $209,5000, 6.0 percent above YOY levels. This marks the 34th consecutive month of YOY price gains.

Distressed sales increased slightly to 11 percent in December but are down from 14 percent last year. Eight percent of December sales were foreclosures and 3 percent were shore sales.

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