U.S. consumer confidence rose a bit in June

 NEW YORK – June 27, 2017 – The Conference Board Consumer Confidence Index increased moderately in June after dropping a bit in May. Overall, consumers have a rosier picture of their situation today, but they’re a bit less optimistic about the future.

The Index now stands at 118.9, up from 117.6 in May. The Present Situation Index increased from 140.6 to 146.3, while the Expectations Index that gauges attitudes about the short-term future declined from 102.3 last month to 100.6.

“Consumer confidence increased moderately in June following a small decline in May,” says Lynn Franco, Director of Economic Indicators at The Conference Board.

“Consumers’ assessment of current conditions improved to a nearly 16-year high (July 2001, 151.3),” Franco adds. “Expectations for the short-term have eased somewhat but are still upbeat. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.”

Present Situation Index
Consumers’ appraisal of current conditions improved in June. Those saying business conditions are “good” increased from 29.8 percent to 30.8 percent, while those saying business conditions are “bad” declined from 13.9 percent to 12.7 percent.

Consumers’ assessment of the labor market was also more positive. Those stating jobs are “plentiful” rose from 30.0 percent to 32.8 percent, while those claiming jobs are “hard to get” decreased slightly from 18.3 percent to 18.0 percent.

Expectations Index
Consumers, however, were less optimistic about the short-term outlook in June. The percentage of consumers expecting business conditions to improve over the next six months decreased from 21.5 percent to 20.4 percent, however, those expecting business conditions to worsen also declined marginally – from 10.3 percent to 9.9 percent.

Consumers’ outlook for the labor market remained mixed. The proportion expecting more jobs in the months ahead increased from 18.6 percent to 19.3 percent, but those anticipating fewer jobs increased from 12.1 percent to 14.6 percent.

The percentage of consumers expecting an improvement in their income rose from 19.1 percent to 22.2 percent, but the proportion expecting a decline increased slightly from 8.7 percent to 9.2 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics. The cutoff date for the preliminary results was June 15.

© 2017 Florida Realtors

Related Topics: Economic indicators
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Fewer options for home equity loans

NEW YORK – Aug. 17, 2015 – Wells Fargo and Bank of America announced they are discontinuing some of their home equity loan products, Bankrate reports.

Bank of America says it’s ending the loans because it’s working on “product simplification,” but Wells Fargo attributes its decision to the “Know Before You Owe” rule, which goes into effect Oct. 3. The rule – also known as TILA-RESPA Integrated Disclosure – brings new documents to the mortgage lending process.

Home equity loans come in two types: closed-ended (usually just called a home equity loan) and open-ended, which is often called a home equity line of credit (HELOC). A home equity loan is a one-time lump-sum loan, which often comes with a fixed interest rate. A HELOC involves revolving credit where borrowers can choose when and how often to borrow against the equity in the property (a lender sets an initial limit to the credit).

“Because closed-end loans were a small percentage of our overall home equity volume, we chose to focus on our line-of-credit offering and not to extend the resources required to retool our closed-end home equity disclosures to meet the new [integrated disclosure] regulations,” Wells Fargo told Bankrate.

Lenders who issue home equity loans are required to comply with the integrated disclosure rules.

HELOCs, however, are not affected by the new regulations.

Bank of America and Wells Fargo say they will still offer HELOC products and will include a fixed-rate option, where borrowers lock in the interest rate on either a portion of the credit line or the entire loan amount.

Wells Fargo says it will be concentrating on making improvements to its home equity line of credit product, including enhancing its HELOC products with a lower line limit and a new minimum of $10,000 for all states (North Carolina is the exception at $12,000).

Source: “Time to Say ‘Goodbye’ to Home Equity Loans?” Bankrate.com (Aug. 7, 2015) and “TRID Pushes Wells Fargo Out of Home Equity Loans,” HousingWire (Aug. 11, 2015)

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