Consumer confidence hit an 18-year high in August with a reading of 138.4 (record is 144.7 in 2000). The strong economy and labor market picture has boosted the assessment of current economic conditions and there was a noticeable uptick in the short-term outlook. Consumer sentiment dipped slightly in September (99.0), but remains above the average reading of 98.5 for 2018. Near record consumer confidence/sentiment levels should continue to support healthy consumer spending that drives two-thirds of the U.S. economy.
The housing market has clearly slowed in recent months as higher mortgage rates have eaten into affordability. New home sales rebounded 3.5% in August to a seasonally-adjusted annual rate of 629,000 units, but the pace of sales in June and July were revised lower. There is 6.1 months of supply available and that is considered a decent balance between supply and demand. As mortgage rates have topped 5%, borrowing costs are increasing at a time when prices are already inflated from a 10-year housing rebound.
