Americans are buying more because they can, and this is good news for sellers of Delray Beach homes for sale.
January reports on consumer spending show purchases on consumer items increased to the highest levels in over 8 months. This revitalized spending seems to suggest a great outlook for this year’s economy, which had some analysts worried late last year as December spending showed reserved caution in consumer purchases despite the holiday season.
Bad News, Good News
December’s numbers which showed a tightening in holiday buys had many economists predicting a worsening economy. A Reuters report cites a chief economist noting that the end-of-the-year statements, which had Americans holding on to their dollars, led to the impression that a possible recession was coming to the U.S. But it seems consumers decided otherwise and ramped up purchases at the start of the year for a variety of goods.
An increase in retail sales of 0.6 percent was reported by the Commerce Department for the month of January, which sailed above the 0.3 percent drop seen in December.
With this actions set by consumers, expectations are now predicting economic growth will improve overall in the first quarter of 2016.
Meaning Behind Consumer Spending
Consumer spending is driven by income levels, and for the month of January, Americans fared well. According to the Bureau of Economic Analysis, personal income increased $79.6 billion and disposable personal income increased $63.5 billion, both of which is 0.5 percent for the month.
Wealth and consumer spending are closely tied into one another. Spending goes up when consumers are feeling particularly wealthy. So far this year, Americans are feeling relatively upbeat about their personal financial situation, as noted by January’s spending levels as well as by a University of Michigan consumer survey. The U of M report found Americans are not concerned about inflation at the moment, which says a lot. Inflation lessens the worth or value of every dollar spent, and if consumers aren’t worried about it than you can expect spending to continue.
Over the next five years, consumers are anticipating inflation to average about 2.4 percent. This number is a drop from previous expectations reported by consumers and is the lowest estimate since 1990 when this question was initially added to the consumer survey.
Economists say consumer outlooks are important because the Federal Reserve System closely watches these responses which measure inflation expectations. Because of this most recent data, it is expected that the Federal Reserve’s next hike may be delayed beyond June, which is the latest prediction for an interest rate hike to possibly hit the market.
Delray Beach Homes for Sale
This healthy economics report is perfect for home buyers looking at Delray Beach homes for sale. As the year moves forward and many winter residents retreat back to their summer homes, predictions are for more homes for sale in Delray Beach to become available.
The city also is expanding and there are many more options available in West Delray Beach. Homes for sale are cropping in new communities just east of State Road 7.
If you are interested in selling or buying homes for sale in Delray Beach and want to know how the local market is doing, talk to a Berkshire Hathaway HomeServices Florida Realty sales professional. From the latest listings and closing sales to the projected housing market economy, our experienced realtors can assist and answer any questions you may have. Give our Delray Beach real estate office a call today!
