Consumer Sentiment Hits Record-Low Current Conditions Reading as Mortgage Rates Climb to Highest Since...

Americans' view of the economy fell in early October, with the University of Michigan's current economic conditions index dropping to 44.7, its lowest reading on record. Overall consumer sentiment slipped to 46.3, down from 48.1 in September and 53.6 a year earlier. Year-ahead inflation expectations edged up to 4.7%. Survey director Joanne Hsu said "frustration over cost-of-living continues to mount," with particularly steep declines among lower-income consumers and households with smaller stock portfolios, according to TheStreet.
Housing is a key source of the frustration:
- On Oct. 8, Freddie Mac said the average 30-year fixed mortgage rate rose to 7.40%, from 7.28% a week earlier and 6.30% a year ago. It was the seventh consecutive weekly increase and the highest level since November 2023
- Existing-home sales fell 2% in August to a 3.98 million annualized pace, per HousingWire
- Inventory climbed to 1.62 million homes
- The median existing-home price still rose 1.6% year over year to $429,100
Redfin's scenarios show how long affordability could stay stretched. If mortgage rates fall to 6% and home-price growth continues at around 2.1%, the typical mortgage payment could return to 30% of household income by November 2031. If prices stop rising, that could happen by February 2029. Redfin stresses these are scenarios, not forecasts.
Zillow estimates the U.S. remains short roughly 4.7 million homes.