Consumers are still wading through the lingering effects of the financial crisis and lacking the confidence needed in the economy to move forward. And as long as consumer spending is lagging on the personal shopping front, homebuying is going to remain out of the question for many families.
This year’s Black Friday shopping failed to kick-start the shopping season with a boom. In fact, retail spending fell for the first time in at least seven years over the Thanksgiving weekend.
Consumers racked up $59.1 billion in purchases in 2012, compared to only $57.4 billion this year, as hyped-up deals and bargains failed to lure in shoppers, the National Retail Federation said.
The good news is that while consumers are not so confident right now, they are de-leveraging debts carried from the pre-crisis days — a potential breakthrough for the housing market.
“Our findings suggest that the consumer de-leveraging experienced since the financial crisis will trough in the next year or two, driven by improved mortgage credit availability and better consumer demand,” Paul Miller, a managing director at FBR Capital Markets, said.