Consumer confidence drops, housing market depressed

Consumer goods corporations may be having a boom in the market, but the consumer confidence survey from the Conference Board, published on Tuesday suggests that the confidence dropped to a nine-month low in April.

The consumer confidence index (CCI) fell to 101.3, from 104.0 in March, the lowest since July 2022. 

A fall in the CCI means that consumers are not optimistic about their financial situation. If they are pessimistic, it could lead to a recession.

The number of people planning to buy household appliances in the next six months has fallen to the lowest level since 2011, to 41% in April, from 44.8% in March.

The short-term outlook measure has dropped below the level associated with a recession.

Depressed housing market 
As a silver lining,  a report from the Commerce Department on Tuesday showed sales of new single-family homes surged 9.6% in March, as a retreat in mortgage rates boosted demand.

The average rate on the 30-year mortgage, which hit a peak of 7.03% in late 2022, was lower, in March, at 6.32%. It is a good time to buy when the mortgage rate dips.

Generally, the housing market has been hard hit by the Federal Reserve’s interest rate hiking campaign since the 1980s. Residential investment has dipped for seven straight quarters. 

Tightened lending rates have made it harder for homebuilders to access funding for new projects and for home buyers to secure loans.