March 2017   Volume 43, Number 3      


Rising Home Values Haven’t Shaken Consumers’ Memories of the Financial Crisis

In a keynote speech at the National Retail Federation’s annual conference in New York, William Dudley, president of the Federal Reserve Bank of New York, said that consumers’ memories of the recession are one reason why retail sales have remained sluggish. Although home prices and values have increased on average nationally, these recent gains aren’t enough to persuade homeowners to spend against the growing value of their homes.

According to the National Retail Federation, retail sales rose 4 percent in November and December. However, retail spending continued to remain choppy during the 2016 holiday season as traditional retailers struggled to meet sales goals due to consumers’ reluctance to spend money backed by the future value of their homes.

Since 2012, home values have increased an average of 40 percent. In addition, Dudley is predicting that it is unlikely that there will be another financial crisis within the next five to ten years, given that the financial system is safer and 2008 housing crisis.

“As time passes, people will forget the financial crisis,” said Dudley. Consumer confidence hit a 15-year high in December 2016. In the future, Dudley predicts that housing equity will once again become a consumer spending source.

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In this issue:

How Trump’s Tax Plan Will Impact Real Estate

Average Real Estate Commissions Decline to Low 5 Percent Range

Consumer Sentiment Declines in January but Remains Near 13-Year High

Foreign Real Estate Investors Still Confident About U.S. Real Estate

Mortgage Applications Decline 12 Percent to End 2016

New Report Names CEO of Zillow as Most Powerful Person in Residential Real Estate

Rising Home Values Haven’t Shaken Consumers’ Memories of the Financial Crisis

U.S. Real Estate Sales Could Be Affected by China’s Capital Controls

Trump Administration Suspends Mortgage Premium Rate Cut

Keep an Eye Out for At-Risk Senior Clients


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