Despite Awesome Jobs Growth, Consumers Don’t Think Their Lives Are Going To Get Better In 2019. What Gives?

Fannie Mae’s consumer confidence survey is a gold mine for housing watchers but, as Julian pointed out yesterday, it’s easy to miss the forest for the trees when digesting it.

A stat that’s worth spending time on is the percentage of respondents who think their financial situation will improve or get worse over the next year. Looking back through the past 12 months, the percentage of people who think their financial lives will get better is never overwhelmingly more than the portion that expect no change or a decline in their fortunes.

I can’t tear my eyes away from the December 2018 number, though—50% of people think their financial lives will either get worse or stay the same in 2019.

How does that sit with December’s blowout jobs number? If people were starting new jobs around the time they were surveyed and working-class wage growth was strong, why the lack of consumer confidence?

There are easy explanations, of course. The Fannie survey is only 1,000 households, so maybe it’s not representative. Maybe surveying people on their personal finances in December when they were cleaned out after buying holiday gifts colored their outlook for the next year. White-collar wage growth in the jobs number wasn’t as strong as other fields, so higher earners might be nervous about their prospects.

Regardless of how you frame this, I see two conclusions—one for the consumer, one for the industry.

Homebuyers, you have to look at all of this together. All this data comes together to the six million home sales that happen every year regardless of sentiment. Let your house search be your guide.

Housing watchers, we might be looking at all this data the wrong way.

Either way, this poses an opportunity for homebuyers. If sellers are antsy because they read headlines that say consumer sentiment is weak, buyers have an edge in negotiations.

For those of us in the industry, keep building your brand and offering great service and the rest will take care of itself.

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