U.S. Consumer Sentiment Rises For First Time In Four Months

The Conference Board reported This Week in Real Estate that U.S. consumer sentiment rose for the first time in four months. The consumer confidence index experienced a positive shift, rising to 102 from 97.5 in April. The increase surprised analysts who had expected a different outcome. Meanwhile, April pending home sales declined by 7.7% and 7.4% compared to the previous month and the same period last year, respectively. While home sales seem dependent on interest rates, home prices appear to remain impervious to them. The latest Case-Shiller Index revealed that home prices soared to a new record high in March, with an annual gain of 6.5%. This marks the sixth time the index has reached a new record over the past year and the ninth consecutive month of annual appreciation. Notably, home prices are now up by 2.7% compared to the peak observed in June 2022. Below are a few newsworthy events from the fourth week of May that influence our business:  
PENDING HOME SALES SLUMPED 7.7% IN APRIL. Pending home sales in April fell 7.7%, according to the National Association of REALTORS. “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said NAR Chief Economist Lawrence Yun. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.” “Home prices are hitting record highs, but the pace of gains should decelerate with more supply,” said Yun. “However, the prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs.” Read the full story here.
HOME PRICES NOT BUDGING, HIT NEW HIGH IN MARCH: CASE-SHILLER. Home prices continued to increase in March, reaching a new high, according to the latest S&P CoreLogic Case-Shiller national home price index report. Home prices are now 6.5% above their level last year, on par with the increase registered in February.  Across the nation, home prices increased 0.3% month-over-month, slowing down from the 0.6% growth in the previous month. Housing inventory jumped 23.5% in March, but existing home sales dipped 4.3% in March following February’s large gain, according to Realtor.com Senior Economist Ralph McLaughlin. Inventory is up but is still roughly 40% lower than pre-pandemic levels.  Read the full story here.
U.S. CONSUMER CONFIDENCE ROSE IN MAY. “Confidence improved in May after three consecutive months of decline,” said Dana M. Peterson, Chief Economist at The Conference Board. Consumers’ assessment of current business conditions was slightly less positive than last month. However, the strong labor market continued to bolster consumers’ overall assessment of the present situation. Looking ahead, fewer consumers expected deterioration in future business conditions, job availability, and income, resulting in an increase in the Expectation Index. Nonetheless, the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years. Read the full story here.

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