Economy Watch: Case-Shiller Indices Still Going Up

By Dees Stribling, Contributing Editor

S&P Dow Jones Indices reported on Tuesday that the Case-Shiller Home Price Indices continued to increase as of June. The national index was up 7.1 percent in the second quarter and 10.1 percent over the last four quarters. The 10-city and 20-city composites both posted returns of 2.2 percent for June and 11.9 percent and 12.1 percent, respectively, over 12 months.

Since the increases are measured until the end of June, not July, the impact on prices of most of the recent increases in mortgage rates—whatever that impact might be— wasn’t registered in this report. Still, all 20 cities posted gains on a monthly and annual basis. But only six cities saw prices rising faster in June compared with May, as opposed to 10 during the previous month.

All 20 cities have shown monthly gains for at least three months in a row. Six markets—Charlotte, N.C.; Cleveland; Las Vegas; Minneapolis; New York; and Tampa, Fla.—showed acceleration. Atlanta took the lead with an uptick of 3.4 percent, while San Francisco was up 2.7 percent in June. New York posted a gain of 2.1 percent, its highest since July 2002. Dallas and Denver reached new all-time highs (as they did last month), with increases of 1.7 percent each in June.

“Overall, the report shows that housing prices are rising, but the pace may be slowing,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, noted. “Thirteen out of 20 cities saw their returns weaken from May to June. As we are in the middle of a seasonal buying period, we should expect to see the most gains.”

Consumer confidence edges up

The Conference Board said on Tuesday that its Consumer Confidence Index, which had declined in July, surprised on the upside (a bit) by increasing slightly in August. The index now stands at 81.5 (1985 = 100), up from 81.0 in July. The index is based on a random sample conducted for the Conference Board by Nielsen, with a cutoff date for the preliminary results of Aug. 15.

Consumers’ assessment of current conditions dropped a little. Those saying that business conditions are “good” decreased to 18.4 percent from 20.8 percent, while those asserting business conditions are “bad” was unchanged at 24.8 percent. Those claiming jobs are “plentiful” decreased to 11.4 percent from 12.3 percent, while those claiming jobs are “hard to get” declined to 33 percent from 35.2 percent.

“Consumers were moderately more upbeat about business, job and earning prospects,” Lynn Franco, the organization’s director of economic indicators, explained. “In fact, income expectations, which had declined sharply earlier this year with the payroll tax hike, have rebounded to their highest level in two and a half years.”

Wall Street was down in the dumps on Tuesday, perhaps worried about the disruptions military action against Syria might cause, with the Dow Jones Industrial Average off 170.33 points, or 1.14 percent. The S&P 500 dropped 1.59 percent and the Nasdaq cascaded downward by 2.16 percent.