Daily Economic Update: Consumer Confidence, House Price Index

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 mortgage rates and the latest inflation expectations.

• S&P Case Shiller House Price Index (HPI) data released today show some mixed signs of recovery for the housing market. While the year-over-year index shows 2.6 percent and 3.3 percent decline for 10-City Composite and 20-City Composite respectively, the month-over-month decrease is easing down. The 10-City HPI shows a 0.2 percent decline for February, less steep than the 0.3 percent decline and 0.4 percent decline of the two prior months. Today’s data captures three-month moving averages from December 2010 to February 2011. This period has also been characterized by some severe weather  issues across the country.  Washington D.C. was the only market to post a year-over-year gain with an annual growth rate of +2.7%. Detroit, also posted a +1.0% increase in February over January, the only city with a positive monthly change. The average current home prices across the metropolitan areas are at the level where they were in the summer of 2003.
• Separately, Consumer Confidence Index came at 65.4 and shows 1.6 points improvement from last month. The consumer's evaluation of the employment  situation improved substantially, a 2.6 point drop in those saying jobs are currently hard to get to 41.8. This is the lowest reading in more than two years. Also, consumer purchases are up as well as inflation expectations. Those who plan buy an automobile within six months increased to 12.4 percent in April from 11.3 percent in March, while those expecting to buy a home rose to 5.5 percent from 4.1 percent, and those planning to buy major appliances increased to 49.1 percent from 43.8 percent. More consumers see their income increasing in the next six months. There was no improvement, however in the assessment of future conditions.