More consumers are expecting a recession, survey suggests
Consumer confidence in the economy ebbed in August as worries about jobs and income rose, according to the latest reading of The Conference Board's Consumer Confidence Index and results of the accompanying survey.
The index measures consumers' assessment of current and expected business and labor market conditions. It decreased 1.3 points in August.
The expectations index, a forward-looking measure, also decreased and remained below the threshold that typically signals a recession ahead. At the same time, the share of respondents expecting a recession over the next 12 months rose to the highest level since April's peak, according to the report.
“Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices," Stephanie Guichard, senior economist at The Conference Board, said in a statement. "Meanwhile, references to high prices and inflation, including food and groceries, rose again in August. Consumers’ average 12-month inflation expectations picked up after three consecutive months of easing."
Median-income households need 36% of their income for mortgage payments
Households earning the median national income needed 36% of their income to afford a new home and 37% of their income to afford an existing home in the second quarter, according to the National Association of Home Builders/Wells Fargo Cost of Housing Index.
For low-income earners — defined as those making only 50% of the $104,200 median income — needed an even greater share.
For a new home, they'd have to spend 71% of their income on mortgage payments. An existing home would take 74% of their annual income.
"Builders have been working diligently to make new homes more affordable by reducing square footage, lowering prices and offering a host of buyer incentives,” National Association of Home Builders Chairman Buddy Hughes, a home builder and developer from Lexington, North Carolina, said in a statement. “The Cost of Housing Index shows these efforts have moved the needle in the right direction, but much more needs to be done on the policy front to reduce regulatory burdens, address construction labor shortages and ease building material supply chains to allow builders to increase the nation’s housing supply.”
