An increase in home prices as well as other factors, which include the looming holiday season, gave rise to an increase in consumer spending in the month of October.
Home prices helped Deloitte's Consumer Spending Index to rise to 4.02 in October. There was an 8% increase in prices compared to 2011 third quarter reports. This gain, the likes of which has not been seen since 2004, was likely the main player in the rise of consumer confidence levels.
Carl Steidtmann, the author of the index as well as chief economist for Deloitte, gives credit to both the recovery of the housing market and falling energy prices. He says these factors "[boosts] confidence and consumers’ willingness to spend." He believes that unless "legislative issues are resolved", this may only be a short term effect.
The National Association of Realtors reported that September existing-home sales rose 11% since the same time a year earlier.
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