Industry News

Consumers cautiously upbeat about economy

Home-price declines are top of mind when thinking about housing markets

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Despite growing weakness in the housing market, consumers remained cautiously upbeat about prospects for the overall economy in a November survey of consumer confidence. The index of consumer sentiment was 92.1 in the November 2006 survey, just below the 93.6 in October and substantially above the 81.6 recorded last November, according to the University of Michigan's Survey of Consumers. The November 2006 data reversed only a minor part of last month's surge, as the index remained 10 points above the level recorded three months ago. Home-price declines have become the most common factor cited by consumers in their evaluations of home-buying conditions. The proportion of consumers that reported declines in home prices has doubled in the last three months, with nearly half of all consumers citing home-price declines; in just three other surveys during the past 50 years have more consumers mentioned home-price declines. Consumers are uncertain about how much further home prices will...