US consumer confidence ebbs
Home prices rise
WASHINGTON, Oct 25, (Agencies): US consumer confidence declined in October following successive gains in the prior two months, according to Conference Board figures released Tuesday.
The Board’s consumer confidence index fell to 98.6, down from September’s downward-revised result of 103.5. Analysts had forecast the index to drop to 100.8.
“Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat,” Lynn Franco, the board’s head of economic indicators, said in a statement.
“However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term but at a moderate pace.”
Those saying business conditions were “good” fell slightly from 27.7 percent to 26.2 percent but those saying circumstances were “bad” rose from 15.8 percent to 17.7 percent.
Views on the labor market also dimmed, with the share of those believing jobs were “plentiful” falling to 24.3 percent from 27.6 percent. The percentage of consumers who said they believed business conditions would improve over the next six months was 1 point lower at 16 percent, according to the survey.
In a separate report, US home prices rose 5.1 percent in the year to August
as home buyers competed for fewer properties, helped by low mortgage interest rates, some wage growth and low unemployment. The S&P CoreLogic Case-Shiller report published on Tuesday said its 20-city index was up 5.1 percent, after a rise of 5.0 percent in the year to July. The national index has now almost recovered to the record high set in July 2006 before the financial crisis of 2008.
“All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month,” David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said.
The acceleration in home price inflation comes after other signs the housing recovery is gaining strength.
Sales of existing US homes increased 3.2 percent in September from August, but the number of homes for sale has fallen nearly 7.0 percent from a year ago, the National Association of Realtors said last week. Just 2.04 million existing homes were for sale in September.
Building of new single-family houses rose 8.1 percent in September, in data published earlier by the Commerce Department, although the annual rate of 783,000 starts remains well below the historical average of more than one million annual rate of new home building.
“Demand is high and enthusiasm for homeownership remains strong, especially among all-important young, minority and would-be first-time buyers,”
Svenja Gudell, chief economist at real estate data provider Billow, said.
Case-Shiller’s national index, after seasonal adjustment, rose 0.6 percent month-over-month in August, while the 10-city and 20-city indexes rose 0.2 percent.
Portland, Seattle and Denver reported the strongest year-over-year increases for the seventh month in a row, with gains of 11.7 percent, 11.4 percent and 8.8 percent, respectively, as buyers were forced out of the expensive Silicon Valley area in California.
After the financial crisis of 2008, home prices plunged 35 percent from their peak in July 2006 until they bottomed out in March 2012. They have since risen to just 7.2 percent below the peak.