Despite aggressive interest rate cuts by the Federal Government to maintain jobs and even a stimulus package sent out to assist with finances, consumer confidence is still lingering around its lowest level in close to two decades. With everything much more expensive now and the dollar still staggering to keep up against to the Euro, consumers are more likely to remain pessimistic about the economy and market landscape until at least sometime next year, and this fact is something that hurts the housing market the most more than anything else.
Indeed, a combination of the mortgage crisis and weak consumer confidence will cause the real estate market to suffer extensively throughout the year, hitting the industry with a double blow that squeezes it from both ends. The mortgage mess has led to an enormous number of foreclosures that have brought thousands of homes to the market, while a weak response from consumers means that these homes won't be sold anytime soon.
Lynn Franco, leading director of the Consumer Research Center of TCB, or The Conference Board, has commented on the issue and said that consumer confidence is at the weakest it has been in 17 years. The Conference Board is recognized as producing the Consumer Confidence Index, a representation of the optimism consumers feel towards the economy which is measured by their activities of spending and saving.
In regards to the latest CCI evaluations, Franco believes that the current values look troubling in terms of where the economy is heading overall, and especially in regards to the housing market. She says that what with the way consumers are feeling apprehensive towards the market, not only concerning current circumstances but also future possibilities, they will most likely put off such an enormous purchase until they start to believe that things are at least a little more stable in the economy.
There was a report by the CCI in early 2007 that recognized a swelling of consumer confidence at the time, something that influenced economists to predict that the rest of the year would witness a turnaround for the real estate industry. However, this never happened, and in fact, consumer confidence went down considerably for the remainder of the year.
Inflation has had a considerable impact on consumer spending too, and especially in regards to real estate. With the cost of fuel prices and food at the level they are currently, very few people are willing to commit to the opportunity of buying a home, seeing it as a risky maneuver that can significantly burden them financially. Furthermore, employment is seen as something that is at risk for people across the nation, with job layoffs a very real threat currently for hundreds of individuals. When taking these aspects and seeing the big picture, it comes as no surprise that the housing market is suffering through one of the toughest times in decades.
Even though homes may been cheaper now than they have been in years, buyers are sitting on the sidelines still because they fear that their credit scores aren't good enough to warrant finding a loan that can purchase them a home. Others are simply waiting it out and wanting to see how low prices are going to drop until they feel there's a good enough opportunity to take the plunge into purchasing a new home.
Author Resource:-
Joe Kenny writes for Rebuild.org, offering home equity loans, they also have some great offers on home refinance for any homeowners looking to release equity.
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