When consumers are satisfied or optimistic about their economic situations, they are more likely to buy a home. But with consumer confidence at its lowest level in nearly two decades, according to the Consumer Confidence Index survey, the real estate market is unlikely to rebound until at least 2009, some economists say.

"Consumer confidence is at its weakest level in 17 years," says Lynn Franco, director of The Conference Board's Consumer Research Center, producer of the Consumer Confidence Index, which surveys 5,000 households monthly for their economic views. "It looks troubling for current conditions and in terms of where the economy is headed."

Another survey that tracks consumer confidence -- the Reuters/University of Michigan Surveys of Consumers -- had similar findings. The January survey found the largest proportion of consumers in nearly 20 years reported financial distress, according to Surveys Director Richard Curtin. Consumer sentiment seems to be down for everyone, says Curtin.

"We've had high inflation, fuel prices and weaker job growth affecting lower income households the most and the loss in housing wealth and stock market wealth affecting higher income households," he says.

So what does that mean for the housing market? Nothing good, says Franco. "Given the apprehension that consumers have, not only about current conditions but also looking ahead, they might postpone such a big ticket item purchase until they feel things are a little more stable."

Upturn didn't happen

"We had a tremendous amount of market volatility in August as housing problems spread into the financial sector," says Franco. "That was also coupled with soaring oil prices." More recently, the biggest culprit has been a weakening job market.

"We're picking up much weaker readings in terms of business conditions, which in turn is spilling over into employment decisions," Franco says. "Consumers are telling us that jobs are harder to get this month than they were the month before."