US consumers still confident, but outlook not as rosy

[mahatmakanejeeves]

Associated Press

US consumers still confident, but outlook not as rosy

MATT OTT
Tue, March 29, 2022, 10:14 AM

SILVER SPRING, Md. (AP) — U.S. consumer confidence bounced back in March and remains high, though consumers' short-term outlook is not quite as rosy.

The Conference Board, a business research group, said Tuesday that its consumer confidence index — which takes into account consumers’ assessment of current conditions and their outlook for the future — rose to 107.2 in March from 105.7 in February.

The board's present situation index, which measures consumers’ assessment of current business and labor conditions, also rose this month to 153 from 143 in February.

However, the expectations index, based on consumers’ six-month outlook for income, business and labor market conditions, declined to 76.6 from 80.8 in February. Respondents cited higher prices — particularly gas prices — and the war in Ukraine as the biggest factors. ... The proportion of people planning to purchase homes, automobiles, and major appliances over the next six months all fell as interest rates have risen, the Conference Board said.

{snip}

[Claustrum]

2. It's funny all these "economists" try to make such a big deal out of a little interest rate increase

We are not talking about interest rates back in the 1990s when it was 20% on home loan. It doesn't make that big a difference when it's 3 or 4%. Is there a difference? Yes. But it's not big enough to stop you from purchasing a home.

[progree]

3. In a nation where 40% can't come up with $400 for an emergency, a 35% higher P&I payment might

be a factor to at least a few.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan this week jumped to 4.16% from 3.85% last week. That’s a sharp contrast from last year’s record-low mortgage rates of under 3%. A year ago, the 30-year rate stood at 3.09%.

https://www.democraticunderground.com/10142889877

A year ago, it says the average mortgage rate was 3.09%. On a $300,000 home, that's a $1,279/month principal and interest (P&I) payment for a 30 year fixed loan.

Now at 4.16% -- that's a $1,460/month payment.

That's 14.2% increase. A $2,172/year increase.

And that's not all. According to the latest Case-Shiller national home prices report, the average home price increased by 18.8% in the past year.

So on average that $300,000 home became a $356,400 home.

The P&I on a $356,400 home at 4.16% interest is $1,735/month

So in one year, thanks to the combination of higher mortgage rates and higher house prices, we have a 35.6% increase in the P&I payment. From $1,279/month to $$1,735/month, a $456/month ($5.472/year) increase.

None of the above includes the other components of most mortgage payments: property taxes and insurance, that have increased at least as much as the property prices.

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Edited to add: the latest monthly Case Shiller report just came out today, March 29:
Their national price index for January is 19.2% higher than the previous January (they have a near 2-month lag)
https://www.prnewswire.com/news-releases/sp-corelogic-case-shiller-index-reports-19-2-annual-home-price-gain-to-start-2022--301512823.html