Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the Case-Shiller index and consumer confidence.
- The November reading of the Case-Shiller index was released this morning which covers the three months of September, October and November. The non-seasonally adjusted 20-city index eased 1.3% from October to November, the third consecutive month of decline. On a year-over-year basis, the gap expanded to 3.7% from 3.4% in October.
- Only one MSA, Phoenix, showed an increase relative to the three months ending in October. The year-over-year price gab expanded in 13 of the 20 metros tracked and only two, Washington and Detroit, are positive relative to November of 2010. Since the Case-Shiller index incorporates data for the three months of September, October, and November, today’s measure does not reflect the more recent price trend that showed up in NAR’s January release. The index has remained relatively flat since 2009.
- Consumer confidence eased 3.7 points in January from December. The majority of the decline was concentrated in the present index which tumbled 8.1 points to 38.4, while the expectations index was nearly unchanged. Consumers generally were more pessimistic on current business and highering conditions. The trend for confidence is important and remains 40% higher than October’s low.
- Today’s release of the Case-Shiller index points to a late 2011 expansion of the year-over-year price gap. This pattern may reflect sharper discounts on distressed properties which was observed in the October and November Existing Home Sales releases from NAR, but a much smaller gap developed in the December NAR release. Look for a muted improvement in next month’s reading of the Case-Shiller index as the December improvement will be average with the trends from October and November. Three consecutive months of steady improvement in consumer confidence ended in January, but consumers remain confident about the future despite weaker current conditions. Improved confidence could boost demand for housing and stymie the flow of delinquencies, but employment is key to the recovery and sustained weakness there could undermine the gains in consumers’ expectations.