Consumer Confidence Rising

       *** BEGIN QUOTE ***

       Consumers are greeting the new year with a lot more confidence than they've had in months, which could be good news for the housing market.

       The RBC Cash Index, created by the international polling firm Ipsos, showed U.S. consumer confidence at 95.3 in January. That was up from 86.9 in December and was at its highest since February of 2006.

       The "expectations" index soared to 83.8 in January from 55 in December. This reading was at its highest in more than two years.

       Consumers continue to feel particularly good about the job market. The January reading came in at 126.3, virtually unchanged from December's 126.5, the highest on record.

       "A lot of the fears people had about the economy seem to be dissipating -- fears about inflation and soaring gas prices. Fears about higher interest rates and the housing bust," says Mark Vitner, an economist at Wachovia Corp.

       *** END QUOTE ***

       [SOURCES: Associated Press,     REALTOR Magazine Online]

It's almost ironic that a "bad economy" pushes interest rates down which in turn ignites interest in the housing market that generates so much economic activity. Then when the economy as a whole starts to recover, interest rates go up; which places pressure on the housing market. Fortunately it is not exactly that simple in and of itself. The turn around in the economy may generate a slight and temporary negative impact on the housing market; however, especially in areas such as Memphis, the higher employment rates, higher consumer confidence and higher wages will start to pick up where the very low interest rates of the past left off.

A stronger economy and work place will bring new buyers to the housing market that missed the opportunity when the interest rates were at all time lows. This over all is good for the housing market in the long run, and will generate  more steady sales than the flood of buyers we experienced in the last few years.   

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