Consumer confidence rose for the second straight month in September, increasing to 108. Consumer feelings about their current circumstances also rose, while expectations for the future also ticked upward to 80.3 in September from 75.8 in August. But even with the increasing consumer confidence, inflation and recession worries remain, as the Federal Reserve continues to remain hawkish—they’re interested in hiking rates—to fight inflation. And you don’t need to look farther than the housing market to see the impact. Home prices have been taking a hit as the average rate on a 30-year fixed-rate mortgage remains above 6% for the second straight week, according to data from Freddie Mac. Housing prices decelerated in July, up 15.8% since last year, down from the 18.1% year-over-year increase in June, according to the latest CoreLogic Case-Shiller Home Price Index. The price slowdown comes as higher mortgage rates have discouraged some potential homebuyers who might not be able to afford more expensive mortgage payments each month in addition to already high home prices. I’ve said this before but it bears repeating: If you are waiting for a housing market crash to make homes more affordable, you’ll likely be waiting a while. A recession could bring lower home prices and interest rates, but there are still more interested buyers than there are homes to purchase. And unlike the crash over a decade ago, American households are in a better position now to continue making home payments. This article originally appeared in ‘The Balance Today’ newsletter. You can get ‘The Balance Today’ delivered to your inbox daily, just sign up here.
