A new report found that consumer confidence fell in August, keeping people cautious about buying a home despite low mortgage rates, CNBC reports.
“I’ve always maintained over the years that consumer confidence means more than rates to the home buying decision,” said Jeff Mezger, CEO of Los Angeles, CA-based KB Home. “We’ve had some great years where interest rates were 8, 9,10%—because people find a way when they feel confident about the future.”
But consumer confidence fell sharply in August, according to a just-released report from the University of Michigan. The report said consumers felt they needed to be cautious about spending in anticipation of a potential recession. That bled into housing.
“The further drop in mortgage rates did nothing to encourage people to buy, as there was no change in intentions to buy a home, and instead there was a 9 point jump in those that said it’s a good time to sell a house—the most since 1992 when this question was first asked,” noted Peter Boockvar of chief investment officer at Bleakley Advisory Group and a CNBC contributor. “Again, refi’s have been the main beneficiary of the cut in rates.”
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