ShareEach 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 Home Price Index and consumer confidence.
- The Case-Shiller 20-city index extended its decline relative to a year ago with a seasonally adjusted 3.03% drop in January. However, the rate of decline decelerated for the 3rd consecutive month as prices eased 0.22% between January and December, down from a fall of 0.39% a month earlier.
- Among metros, 13 reported a decline relative to last January, while five were down, but by a smaller gap and two, San Diego and Washington (DC), were higher than January of 2009. This index lags the NAR median home price figures by a month and reflects home sold between November and January, a period of high levels of distressed sales as shown by NAR’s REALTOR® Confidence Index for February. Furthermore, the Case-Shiller index does not cover 13 states and is weighted such that changes of higher priced homes have a stronger impact on the index.
- Consumer confidence fell 8.6 points to 63.4 in March. The current situation improved, but expectations fell sharply. Expectations for inflation rose, while income growth fell, a pattern that could weigh on consumer spending going forward. In addition, respondents indicated that jobs were less plentiful and harder to get.
- The Case-Shiller home price index is in line with NAR’s figures, which show a sharp decline in prices relative to last year, but a trend that has moved toward stabilization since the late summer. Oil and food prices had a major impact on consumer confidence this month. While core inflation, which impacts mortgage rates, is in check, the average consumer and REALTOR® are feeling the pinch of higher prices at the pump and grocery store. Food prices are likely to remain high due to global shortage, but fuel prices are likely to ease as the situation in Libya stabilizes.