Consumer Sentiment Plunges After a Tumultuous Time
Consumer confidence is low, contributing to a stall in household formation and net move-outs in 3rd quarter. The University of Michigan’s Consumer Sentiment Index – a monthly survey that measures how Americans feel about spending money and the future of the economy – shows lower-than-normal confidence after the economic rollercoaster in the past couple years. The spread of the COVID-19 pandemic in 2020 effectively ended the nation’s longest economic expansion on record. What followed was historic unemployment and a record-breaking decline in gross domestic product (GDP). Yet although the COVID-19 recession was deep, it was also short. With the distribution of vaccines and federal relief, the economy recovered in 2021 almost as much as it declined in 2020. In 2022, inflation climbed to a 40-year high and the Federal Reserve started hiking interest rates to combat that increase. With so much fluctuation in the past few years, it’s no surprise that economic uncertainty is weighing on housing demand. While consumer confidence ticked up between July and September 2022, sentiments remain near 30-year lows.