The confidence of American consumers rebounded this month to end the year on a high note despite high inflation, rising interest rates that have made credit cards and mortgages more expensive, and growing anxiety about a possible recession. The Conference Board reported Wednesday that its consumer confidence index rose to 108.3 in December, up from 101.4 in November and its first increase in months, per the Wall Street Journal. It's a sharp rebound, pushing the index to its highest level since April. Last month's figure was the lowest since July. The board's expectations index—a measure of consumers' six-month outlook for income, business, and labor conditions—rose to 82.4 from 76.7. Readings near or below 80 are associated with recession, reports the AP.
Lynn Franco, senior director of economic indicators at the Conference Board, noted that inflation expectations retreated in December to their lowest level since September of last year, mostly due to recent declines in gas prices. The number of people saying they planned to go on vacations rose, but the number of those intending to purchase homes and big-ticket appliances declined, reports the AP. The Journal reports the Dow rose more than 500 points on the news and "all 11 sectors of the S&P 500 were in the green, with most up more than 1%."
There was more news on the housing front Wednesday: Sales of previously occupied US homes slowed for the 10th consecutive month in November, with existing home sales down 7.7% last month from October to a seasonally adjusted annual rate of 4.09 million, the National Association of Realtors said. That's a slower sales pace than what economists had expected, according to FactSet. It also marks the longest streak of monthly sales declines on records going back to 1999, reports the AP. Despite the slowdown, home prices continued to rise last month, though at a far smaller rate than just a few months ago.
The national median home sales price rose 3.5% in November from a year earlier to $370,700. Nearly a quarter of homes that sold last month fetched more than their list price, said Lawrence Yun, the NAR's chief economist. On average, homes sold in just 24 days of hitting the market last month, up from 21 days in October, the NAR said. That's still a relatively quick turnaround, as before the pandemic homes typically sold more than 30 days after being listed for sale. The inventory of homes on the market declined for the fourth consecutive month. Some 1.14 million homes were on the market by the end of November. That amounts to a 3.3 months' supply at the current sales pace. In a more balanced market between buyers and sellers, there's a 5- to 6-month supply. (Read more economy stories.)