U.S. home price rise momentum weakens, consumer confidence falls

Tue Feb 25, 2014 4:46pm EST

1 of 2. People walk near new single family homes under construction in San Marcos, California October 25, 2013.

Credit: Reuters/Mike Blake

(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."

(Reporting by Rodrigo Campos; Additional reporting by Leah Schnurr and Luciana Lopez; Editing by Andrea Ricci)

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Comments (21)
disengage wrote:
Too many things are going wrong, with President Obama’s agendas. These are very scary times for America. In the face of socialism failing. OUr chosen leader decides to play with all our lives and run his professor theories. Almost nothing that he does, seems right. So yes, it is a very scary time for all of us.

Feb 25, 2014 11:40am EST  --  Report as abuse
JustProduce wrote:
All data is lagging by nature. Data does not show what it is but what it was. As a result, this is not about arguing whether things are not well but about the fact that things were worse.
As for today, we can either observe the evidence now or wait for the data tomorrow. In either case, the fundamentals are that Obama has missed the biggest opportunity in history.
Would you rather buy a house at the top when no more value could be gained? Or would you buy at the bottom when there is nothing but upside? Well, the economic fallout was similar. There is nothing better than starting from the bottom where there is only upside. Then add the fact that the world was scared and decided to send their money to pump US markets. Finally, add the fact that our monetary policy has been of the most stimulating nature thanks to Bernanke, an expert in the great depression.
All that was left was for a leader to unite everyone behind the recovery effort. This was a great opportunity for s leader to create trust in the system.
Instead, Obama focused on creating division. Moreover, he fear mongered by promoting distrust in the system. Rather than making the recovery about the nation, he made it about himself as the savior of all.
No wonder we lost the greatest opportunity. What a loser.

Feb 25, 2014 1:04pm EST  --  Report as abuse
@disengage, you go of about ‘socialism failing’, here is the definition of Socialism—

so·cial·ism noun \ˈsō-shə-ˌli-zəm\
: a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies

Full Definition of SOCIALISM

: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
a : a system of society or group living in which there is no private property
b : a system or condition of society in which the means of production are owned and controlled by the state
: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

Please explain how ANY implemented or proposed policy by the Obama administration fits this definition.

@justProduce to quote you ‘Instead, Obama focused on creating division. Moreover, he fear mongered by promoting distrust in the system.’ Looks like another person either fooled by the GOP or one that is part of the plan. Here is what happened, in the weeks leading up to the Obama administration the GOP leadership came up with a plan to oppose ANYTHING proposed by the democrats in an attempt to make DC more partisan. Their thinking was that since Obama ran on bi-partisanship (and btw has made many genuine attempts at it) if they could make it such a partisan environment they hope he would be blamed for it since he ran on it. And you know what is most vile about that plan? it put party before country when we where at a time where leadership was sorely needed from ALL elected officials, and we only got it from one political party, while the other did every thing they could not to lead.

It just sickens me how far off the deep end the right has gone that they just dismiss these two realities.

Feb 25, 2014 1:43pm EST  --  Report as abuse
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