Political discussions typically do not inspire confidence. Very rarely does a person turn on a political debate or watch a panel of “experts” engage in some political sparring and walk away feeling good about the economic future of the country. Especially this year, as economists say the current group of presidential candidates deserve an F for addressing economic matters in a meaningful way, realtor.com reports.
This poor attempt at addressing the economy may be part of the reason why the Consumer Confidence Index declined 2.1 points in May to reach the lowest level since November. Additionally, the Expectations Index is at its lowest level since February 2014.
Despite all of this, consumers’ intentions to buy homes and automobiles have actually continued to increase. In May, six percent of respondents said they intended to purchase a home within the next six months. A percentage this high has not been seen since 2005.
So why are people saying they are less secure about the future but continuing to purchase homes and cars? The short answer is because the economy isn’t as bad as the candidates want you to believe; each candidate needs to make it seem like the sky is falling so you’ll buy their umbrella.
Despite it being made out like we are on the precipice of the 21st century’s version of the seven plagues, the reality is that unemployment has significantly declined, job creation remains positive, and the risk of a recession remains low.
People are becoming especially keen to purchase a new home as rents continue to rise while mortgage rates remain at historically low levels. In fact, it isn’t fear of a recession or a bubble bursting that is keeping people from buying a home, over the past two years the number one reason keeping potential buyers from purchasing a home has been the inability to find one that meets their needs.
Regardless of what the numbers (or the politicians) say, the current actions of the typical consumer are much more positive and a better overall indicator of the economy.