US home price gains accelerate
Consumer confidence shows solid gain in January
WASHINGTON, Jan 28, (AP): US home prices rose at a faster pace in November than the previous month as lower mortgage rates and a sharp drop in available properties have pushed would-be buyers to bid up home values.
The S&P CoreLogic Case-Shiller 20-city home price index rose 2.6% in November from a year ago, up from a 2.2% annual gain in October.
Price increases remain modest: They fell to a seven-year low in July before picking up last fall. The number of homes for sale plummeted 8.5% last year to 1.4 million. That represents a three-month supply at the current sales pace, the lowest on records dating to 1982.
And mortgage rates fell to a three-month low last week and are far below their levels of a year ago. That helps make purchasing a home more affordable, even as home prices rise nearly at the same pace as wages.
The average rate on a 30-year fixed mortgage declined to 3.6% last week, down sharply from 4.45% a year ago. That partly reflects the impact of the Federal Reserve’s cuts to its short-term interest rate, as well as
This file photo shows a sold sign posted on a real estate sign outside a home in Derry, New Hampshire. On Jan 28, the Standard & Poor’s/CaseShiller 20-city home price index for November is
being released. (AP)
a lower yield on the 10-year Treasury note, a benchmark rate that influences mortgage costs.
Home prices rose the most in November in Phoenix, where they increased 5.9%, followed by Charlotte with 5.2% and Tampa at 5%. All 20 cities reported price gains.
Home values have fully recovered from the housing bust and have moved even higher. The 20-city index is nearly 6% above its 2006 peak, though that figure is not adjusted for inflation. US consumer confidence showed a strong gain in January, bolstered by continued strength in the job market.
The Conference Board said Tuesday that its consumer confidence index rose to a reading of 131.6 this month, up from 128.2 in December.
Lynn Franco, senior director of economic indicators at the Conference Board, said that the increase, which followed a more moderate advance in December, reflected a more positive assessment of the current job market and increased optimism about future job prospects. ‘”Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy slowing slowing in early 2020,” Franco said.
The Conference Board’s present situation index and its expectation index both showed gains in January.
Consumer confidence surveys are closely followed for clues about whether households are in a buying mood. Consumer spending accounts for 70% of economic activity.
The economy slowed in 2019 and is expected to slow further in 2020 but solid consumer spending is expected to keep the country out of a recession.
This file photo shows a portion of the 1040 US Individual Income Tax Return form. The IRS began accepting and processing tax returns for individuals on Jan 27. (AP)