With basketball season almost complete, thoughts of another kind of rebound is quickly approaching. Spring always holds an upswing in Louisville real estate but the real question is, “How will this Spring compare to the last two Springs?”
This AP story cites a “partial rebound in consumer confidence” as a reason for optimism.
The Conference Board said Tuesday its Consumer Confidence Index rose to 52.5 in March, recovering about half of the nearly 11 points it lost in February. Analysts expected a reading of 50 for March, but the index is still far below the 90 reading that’s considered healthy.
This could just be an adjustment from the statistically severe low this Winter but it’s something to keep our eyes on.
Separately, the Standard & Poor’s/Case-Shiller 20-city home price index showed prices rose 0.3 percent from December to January, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose. But there’s some worry the momentum in the housing market won’t be sustained. Home sales sank during the winter, and government incentives that have propped up the market are ending.
As the home buyer tax benefits run out, first-time homebuyers are less likely to be in the market. Most experts believe this will reduce the total number of sales for 2010 but that some of the higher end inventory will continue to move due to more drastic price cuts.
More worrisome is the effect of the health care legislation on consumer spending.
Economists watch the figures closely because consumer spending, including health care and other major expenses, accounts for about 70 percent of U.S. economic activity and is critical to a strong economic recovery.