It's straight ahead all right, but the real question is when. First of all, let's clarify this a little. We're talking about residential real estate and more specifically about the regions that have been lately whacked by stagnant or falling home prices, high levels of listing inventories and tougher mortgage underwriting standards. As we know, all real estate is local, so some areas are doing just fine, like generally the Northwest and New York City.
The rebound may still be a few months away for the affected regions. We're seeing encouraging signs, though, that the slide appears to have come to a halt and where you go from there is up. First cautiously maybe, but up anyway.
Just last week the Commerce Department issued a report that new home sales for April jumped 16.2%, a solid gain. Today the Conference Board tells us that the Consumer Confidence Index increases a few ticks, indicating that the consumer is mildly optimistic. Even the job market remains quite healthy. These are good signs for the psychology of buying, whether it's a new house or a piece of furniture or whatever. Yes, we still hear and read about the real estate market's struggles, but at least some positive news are now cutting in and claiming more headline space. That's what we need.
The consumer index is an important barometer. The consumer, after all, is the king because his spending represents about two-thirds of all of our economic activity. And the mortgage and residential housing industries play major roles in it.