Reports of increased consumer confidence in the US housing market may be overstated according to a new report
Reports of increased consumer confidence in the US housing market may be overstated according to a new report.
The LegalShield Real Estate Index posted a 0.2% decline in January compared to December and at a reading of 100.3 is 2.7% below January 2017.
The index’s movement predicted that November’s surge in home sales would not continue and now suggests a short-term weakness in the market.
"Our data continues to indicate that consumers are right to feel good about their current financial situations and the overall economy in the first half of 2018, despite high consumer debt levels and a 12-year low in the personal savings rate," explained James Rosseau, LegalShield's chief commercial officer.
Meanwhile, LegalShield’s Consumer Financial Stress Index suggests that the recent optimism shown in the Conference Board’s Consumer Confidence Index may be overstated.
The firm’s Housing Activity Index was up 1.8 points in January as the foreclosure component showed significant improvement. Increased investment in residential construction helped move the index off the flat line of the past 6 months.
"While we don't anticipate a huge rebound in housing construction activity in the near-term, there are signs that homebuilders are starting to overcome some of the headwinds they faced last year," Rosseau added. "The housing sector will be a key wild card to watch for the U.S. economy in 2018."
The firm’s data suggests that bankruptcies and foreclosures should remain subdued in the short term.
