Economy Watch: Case-Shiller Home Prices Up in October
- Jan 02, 2014
S&P Dow Jones Indices released its October S&P/Case-Shiller Home Price Indices on Tuesday, which showed both the 10-city and 20-city composites posting year-over-year gains of 13.6 percent. That’s the highest gain since February 2006, according to Case-Shiller, and marks the 17th consecutive month that both composites increased on an annual basis.
Cities at the top of the range (Las Vegas, San Diego and San Francisco) saw smaller annual increases, however. On the other hand, cities that have been relatively underperforming—such as Cleveland, New York and Washington—saw their annual gains grow. Miami showed the most improvement year-over-year, while Chicago recorded its highest annual increase (10.9 percent) since December 1988.
As for the month of October, the two composites showed gains of only 0.2 percent. Eighteen cities posted lower monthly rates in October than in September. After 19 months of gains, San Francisco showed a slightly negative return, but Phoenix held onto its streak and posted its 25th consecutive increase.
Does the new data point to a bubble in the housing market? Robert Shiller, one of the co-creators of the index, broached the possibility on CNBC on Tuesday when he said that the market “has its own momentum right now as people see it coming back. We’re sort of in the beginnings of another housing bubble.”
Consumer Confidence Spikes in December
The Conference Board said on Tuesday that its Consumer Confidence Index, which had decreased in November, rebounded in December. The index now stands at 78.1, up from 72.0 in November (the happy year 1985 = 100). The Present Situation Index increased from 73.5 to 76.2, while the Expectations Index increased from 71.1 last month to 79.4 in December.
“Consumer confidence rebounded in December and is now close to pre-government shutdown levels [September 2013, 80.2],” noted Lynn Franco, director of economic indicators at the Conference Board, in a statement. “Sentiment regarding current conditions increased to a five-and-a-half year high (April 2008, 81.9), with consumers attributing the improvement to more favorable economic and labor market conditions. Looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects.”
On Tuesday, ahead of the New Year’s Day holiday, Wall Street ticked upward, with the Dow Jones Industrial Average ending the day up 72.37 points, or 0.44 percent, and ending the year up 26.5 percent. The S&P 500 gained 0.4 percent and the Nasdaq advanced 0.61 percent for the day. Both indices were also up for the year, around 30 percent and 38 percent, respectively.