Consumer Confidence Hits 3-Year High but will it Help Home Sales?

The Consumer Confidence Index rose in February to its highest point in three years, which means Americans are feeling more optimistic about their income prospects and the direction the economy is headed – but will this newfound "happiness" translate into increased business for mortgage bankers and Realtors? That's hard to say. New figures also tell us that during the 'Great Recession' some 6.5 million families have moved out of the middle class and now earn less than $50,000. Lenders and Realtors need to calculate how much house a family earning $50k can afford and proceed accordingly. Although the consumer confidence measure appears to be good news it doesn't account for several negatives out there: wage disinflation, home price disinflation, combined with interest rate inflation. Then again, some analysts are now starting to wonder if the bull market in stocks is headed for a correction – which means bond prices will rise and rates will fall. Now let us pray…