The level of confidence in consumers increased during October, which may help the housing market in the coming months.
According to a report from The Conference Board, the Consumer Confidence Index rose to 72.2 in October, from September's level of 68.4. Additionally, the Expectations Index jumped to 82.9 from the previous month's 81.5, and the Present Situation Index leaped to 56.2 from the former level of 48.7.
"The Consumer Confidence Index increased again in October and is now at its highest level this year," said Lynn Franco, director of economic indicators at The Conference Board. "Consumers were considerably more positive in their assessment of current conditions, with improvements in the job market as the major driver. Consumers were modestly more upbeat about their financial situation and the short-term economic outlook, and appear to be in better spirits approaching the holiday season."
Consumers show cautious optimism
Meanwhile, the board's Consumer Confidence Survey showed that approximately 10 percent of those surveyed felt the labor market improved, which was two percentage points higher than in September. Those who felt a job was difficult to obtain fell more than one percentage point. When looking toward the future, 19.2 percent of consumers expected more jobs, which was an increase from the previous month. Those who though jobs would be more difficult to obtain also rose, this time to more than 20 percent.
More than 16 percent of respondents said the current business conditions level was in a good place. This was an increase from the previous figure of 15.3 percent, the report showed. Those who though conditions were negative fell to 33.1 percent, seven basis points lower than the previous month.
Continued confidence gains from consumers may trigger a boost in home purchases in future real estate records. However, recent figures showed a slight decline in the level of home loan applications.
According to mortgage data from the Mortgage Bankers Association, mortgage applications fell 4.8 percent during the week ending October 26, compared to the previous week. Additionally, the Refinance Index dropped 6 percent during the same period. Despite these declines, the Purchase Index rose slightly.
Overall refinances fell one percentage point week-over-week, the report added. When examining refinances involving adjustable-rate mortgages, the figure fell 4 percent.