According to the Bank of Korea, the Composite Consumer Sentiment Index edged up to 106.6 in June from 106.1 in May, marking a second consecutive month above the 100 threshold after recovering from Gulf-triggered energy jitters.
A reading above 100 means consumers are more optimistic than the long-term average.
The index had stood at 112.1 in February before falling to 99.2 in April, when higher oil prices, currency volatility and Middle East-related uncertainty weighed on household confidence.
Assessments of current living conditions improved slightly to 94 from 93, while perceptions of current economic conditions rose to 86 from 83.
Expectations for household finances were unchanged at 97, while the broader economic outlook slipped slightly to 92 from 93.
Household income expectations remained steady at 100, and spending plans held firm at 110, supported by expectations of stronger income growth and hiring prospects amid robust exports and a buoyant stock market.
Jitters over higher interest rates, inflation and housing prices, however, darkened the future outlook.
The interest-rate outlook index jumped 12 points to 126, its largest monthly increase since December 2016. The BOK said expectations of a policy rate hike and higher market interest rates were reflected in the reading.
The home-price outlook index rose eight points to 120, its highest level since January, as apartment sale and jeonse prices accelerated, particularly in Seoul and Gyeonggi Province.
The index has now risen for three consecutive months after falling to 96 in March.
Recent housing data illustrate why consumers are becoming more sensitive to home prices. Seoul apartment prices rose 0.27 percent in the week ended June 15, matching the previous week's pace, while Dongtan in Gyeonggi Province jumped 2.22 percent over the same period, the fastest increase nationwide.
Inflation expectations also remained elevated.
Consumers' perceived inflation rate over the past year stayed at 3.0 percent, while one-year-ahead inflation expectations remained unchanged at 2.8 percent.
Three-year inflation expectations rose 0.1 percentage point to 2.7 percent, while five-year expectations held steady at 2.6 percent.
Petroleum products remained the dominant factor shaping inflation expectations, cited by 77.5 percent of respondents. But that share fell by 7.7 percentage points from May as international oil prices retreated toward $70 a barrel after the United States and Iran made progress toward a memorandum of understanding aimed at ending the conflict.
More consumers, meanwhile, pointed to rents and personal services as future price drivers. Public utility charges were cited by 29.6 percent of respondents, followed by agricultural, livestock and fisheries products at 28.6 percent.
The survey was conducted from June 9 to 16 among 2,245 urban households nationwide.
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