Economy Watch: U.S. Housing Price Rise Slows
By Dees Stribling, Contributing Editor
S&P Dow Jones Indices reported the latest S&P/Case-Shiller Home Price Indices on Tuesday, which cover the three months ending in September. The U.S. According to the company, the National Home Price Index was 3.2 percent in the third quarter of 2013 and 11.2 percent over the last four quarters.
In September 2013, both the 10- and 20-city composite indexes gained 0.7 percent month-over-month and 13.3 percent since the same time last year. While 13 of 20 cities posted higher year-over-year growth rates, 19 cities had lower monthly growth in September than August. Prices are still rising, in other words, just not as rapidly as they had been, a trend that might mean that the current run up isn’t a much of a bubble.
“The second and third quarters of 2013 were very good for home prices,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said. “Housing continues to emerge from the financial crisis: the proportion of homes in foreclosure is declining and consumers’ balance sheets are strengthening. The longer-run question is whether household formation continues to recover and if home ownership will return to peak levels since in 2004.”
Consumer confidence drops
Consumers were feeling a little more uncertain this month, according to the Conference Board, which said on Tuesday that its Consumer Confidence Index dropped from 72.4 in October to 70.4 in November. The Present Situation Index edged down to 72.0 from 72.6, and the Expectations Index declined to 69.3 from 72.2 last month.
Consumers’ assessment of overall current conditions decreased slightly. Those claiming business conditions are “good” edged up to 19.9 percent from 19.5 percent, while those claiming business conditions are “bad” increased to 25.2 percent from 23 percent. Consumers’ appraisal of the job market didn’t change much, with those saying jobs are “plentiful” ticking up to 11.8 percent from 11.6 percent, while those saying jobs are “hard to get” decreasing to 34 percent from 34.9 percent.
Conference Broad chief economist Lynn Franco noted, “Sentiment regarding current conditions was mixed, with consumers saying the job market had strengthened, while economic conditions had slowed. When looking ahead six months, consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions. All in all, with such uncertainty prevailing, this could be a challenging holiday season for retailers.”
Investor confidence down too
The State Street Investor Confidence Index was released on Tuesday as well, and it came in at 91.3 in November, down 4.2 points from October’s reading. The decline was because a relatively steep drop in European investor confidence, down from 111.3 last month to 101.5 in November. Investor confidence in North America and Asia improved slightly.
Wall Street had a lackluster day on Tuesday, with the Dow Jones Industrial Average gaining a hard-to-see 0.26 points, or less than 0.01 percent. The S&P 500 managed to gain 0.01 percent, while the Nasdaq was up considerably more, 0.58 percent.