U.S. home price rise momentum weakens, consumer confidence falls
(Reuters) - U.S. home price gains slowed in December, according to a closely watched housing survey on Tuesday that underscored a loss of momentum in the housing recovery, while consumer confidence drifted lower this month.
The S&P/Case-Shiller 20-city home price index rose a seasonally adjusted 0.8 percent in December, down from a 0.9 percent rise in November. For the 12 months to December, prices were up 13.4 percent, below the peak of 13.7 percent in November and the first decline in the rate of change since June.
"Recent housing data has shown that activity at the outset of 2014 has slowed down," said Jefferies economists in a note regarding the Case-Shiller gauge.
"It is possible that the index has reached a near-term top."
Recent data have shown the housing recovery losing steam in the early part of the year. Housing starts dropped 16 percent in January, the biggest decline in almost three years, and home resales slid to a 1-1/2 year low last month.
Bitter cold and serial snowstorms this winter have been blamed in part for the weakness in the housing sector, though analysts say higher mortgage rates and low inventories have hurt as well.
On Tuesday, Toll Brothers, the largest U.S. luxury homebuilder, reported a fall in quarterly orders for the first time in three years as a severe winter deterred buyers. Home Depot's higher-than-expected profit came in as cost cuts offset weak sales.
A Reuters poll showed U.S. home price inflation, as measured by the S&P/Case-Shiller index, is seen slowing to less than 7 percent this year as mortgage rates rise and there is a gradual transition away from a market driven by institutional buyers looking for bargains.
A sentiment survey on Tuesday suggested consumers were wary of future economic conditions.
Consumer confidence slipped in February, according to a private sector report. The Conference Board, an industry group, said its index of consumer attitudes fell to 78.1 from a downwardly revised 79.4 in January. Economists in a Reuters poll had expected 80.0.
"While expectations have fluctuated over recent months, current conditions have continued to trend upward," Lynn Franco, director of economic indicators at The Conference Board, said in a statement.
"This suggests that consumers believe the economy has improved, but they do not foresee it gaining considerable momentum in the months ahead."