U.S. Home Prices Rise Slightly, Consumer Confidence Drops Again
The Standard & Poor’s Case-Schiller Home Price Index, a closely watched measure of the housing market, rose from April to May by 0.5 percent, suggesting that housing’s steep decline over the past few years may be braking.
Thirteen of the 20 cities in the index reported positive returns compared with April, including Cleveland, Dallas and Boston. David M. Blitzer index chairman at Standard & Poor’s, told the New York Times that “these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing.”
But the market has hardly turned a corner; home values are still down 17.1 percent nationally from May 2008.
The index tracks prices in 20 metropolitan areas across the United States, measuring home price increases and decreases relative to prices in January 2000. The base reading is 100; a reading of 150 means that prices have increased 50 percent since the index began. In May, the index’s value was 139.84, down from its peak of 206.52 three years ago.
“The fact that home prices may be finding some semblance of stability is good news that things are not likely to get worse,” Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C., told Bloomberg. “Folks are still concerned about their jobs” and “the loss of housing wealth is going to weigh on consumer spending for years to come.”
That concern was reflected in a second-straight drop in Americans’ confidence in the economy. The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 46.6 in July, down from 49.3 in June. The drop is larger than analysts had been expecting.