October 26, 2010

S&P/Case-Shiller Show Home Prices Still Falling; Consumer Confidence Improves

The 20-city composite index declined in August 0.2%

Annual growth rates fell in 17 out of 20 cities, and home prices fell in 15 out of 20 cities, according to the latest S&P/Case-Shiller results released Tuesday.

Average home prices across the United States are back to the levels where they were in late 2003 and early 2004, according to the report.

For August, the 10-city composite for home prices fell 0.1%, while the 20-city composite showed a similar fall of 0.2%. The only cities to record improvements were Chicago, Detroit, Las Vegas, New York and Washington.

From August 2009, the 10-city composite increased 2.6%, and the 20-city composite rose 1.7% for the same period.

Though still negative, Charlotte, Cleveland and Las Vegas reported improvements in year-over-year growth at -3.4%, -0.4% and -4.5%, respectively. Growth rates in Los Angeles, San Diego and San Francisco dropped significantly from their July values to 5.4%, 6.9% and 7.8%, respectively.

David Blitzer, chairman of the Index Committee at Standard & Poor’s called the report "disappointing."

"Home prices broadly declined in August. Seventeen of the 20 cities and both Composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows,” he said in an analyst note.

"Indeed, the housing market appears to have stabilized at new lows. At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers’ tax credits," he added.

While the home prices report had little good news to report, the Conference Board Consumer Confidence Index for October showed some improvement over September. Nearly 42% of consumers say business is bad, down from 46%, and 46.1% of consumers said jobs were "hard to get," up slightly from September's 45.8%.

Still, 16% of respondents said they expect business to improve in the next six months, and the percentage of respondents who expect conditions to worsen fell from 16.6% to 14.1%.

Consumers expectations for the job market are mixed. The percentage of people who expect fewer jobs in the future fell to 22% from 22.6%, but the percentage of people who expect more jobs likewise fell to 14.1% from. 14.5%.

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