Industry News

Real estate wealth fuels consumer spending

Homeowners to stock up on furniture, electronics, home improvements

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Surging home values will fuel consumer spending and trigger purchases of furniture, consumer electronics and home improvements, despite higher industry rates, according to a public accounting and consulting firm's index of consumer spending habits. "Consumers are in a strong position to continue spending. Retailers should plan for strong demand, particularly in housing-related products and consumer electronics," said Carl Steidtmann, Deloitte Research's chief economist and author of the monthly Leading Index of Consumer Spending. Substantial income-tax refunds and a leap in payroll employment provide the cash needed for down payments on home purchases. "Many consumers postponed buying new homes until interest rates reached the bottom. With interest rates on the rise, they have decided to get off the dime to avoid higher rates," Steidtmann added. "Baby boomers are purchasing their second homes in retirement and vacation spots, while children of baby boomers are purchasing their first ...