Down consumer confidence affects pending home sales

The National Association of Realtors released its Pending Home Sales report for September this morning. These numbers were down by 4.6 percent compared to August but up 6.4 percent compared to a year ago. Lawrence Yun, NAR chief economist, said consumer confidence and lending are the major factors to these down numbers.

Consumer confidence numbers for October were released earlier this week and they agree with Yun's statement. Despite a slight increase in September, consumer confidence was down in October, according to the Consumer Confidence Index released by the Consumer Confidence Board.

Consumer confidence has steadily declined since February of this year with September being the only month showing an increase. However, that increase was only by 1.2 points. Consumer confidence is down 10 points since October 2010. In the release, Lynn Franco, director of The Conference Board Consumer Research Center said levels are back to 2008-2009 recession levels.

A closer look at the index shows that consumers' positive outlook dropped to where it was in January 2011. This had increased from January to April but has shown a decline since then. Only 3.4 percent said jobs are plentiful. The national unemployment rate for September was 9.1 - a rate the country has hovered around for most of 2011.

It is important to point out that builder confidence was up in October according to the latest numbers from the National Association of Home Builders/Wells Fargo Housing Market Index.