The success of the economy and the housing market rely heavily on consumers, and the more pleased consumers are the more likely they are to invest in both. A new report from the Conference Board shows that consumers were slightly less confident in the market during December compared to the previous month.
According to the Consumer Confidence Survey, the number of Americans who expect business conditions to improve within the first half of 2013 fell to 17.6 percent in December, down from 21.3 percent who agreed in November. Additionally, 21.5 percent of respondents predict conditions will grow worse over the next sixth months, which could put a halt on consumer spending and housing market transactions.
However, more Americans said current conditions are good, as the percentage who agreed increased to 17.1 percent from 14.6 percent. Fewer respondents said current conditions were worsening, dropping from 31.2 percent to 27.3 percent.
Uncertainty regarding the "fiscal cliff" has likely prevented many consumers from reporting being positive about the market on a long-term level compared to the short-term.
Economic factors continue to influence housing market recovery
Home sales generally remain quiet when the economy isn't faring well, as seen throughout the recession. Despite improvements in the market in recent months, though, the survey shows some Americans are not as optimistic - due in part to still-weak economic conditions.
When reviewing expectations for the labor market, less consumers - 17 percent - foresee more jobs in coming months compared to November, when 19.5 percent of respondents indicated they thought job numbers would grow.
Meanwhile, the number of consumers who expect their incomes to increase in the next few months remained at 15.4 percent, similar to the month before, while additional people expect their incomes to decline, rising from 15.6 percent to 18.7 percent.
While consumers have reported being less-than-confident in economic factors, economists predict 2013 to be a year of improvements for both the economy and the housing market. High affordability offered by mortgage rates should reflect positively in real estate records, equaling increased sales and hopefully more confidence.