NEW YORK (Reuters) - Prices of U.S. single-family homes in October plunged a record 18.0 percent from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indices released on Tuesday that indicated a U.S. housing market in the throes of a deep recession.
KEY POINTS: * The composite index of 20 metropolitan areas fell 2.2 percent in October from September. * The price decline, both on a year-over-year and month-over-month basis, came in worse than expectations based on a Reuters survey of economists. * S&P said its composite index of 10 metropolitan areas declined 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.
PETER LEWIS, FUND MANAGER, MURPHY CAPITAL MANAGEMENT, GLADSTONE, NEW JERSEY:
“Technically, the report is probably going to force people to retrench spending and cut back even more. People don’t want to open their wallets unless they know their largest asset is adding value. It’s a negative for retail, for financials and further for consumer confidence.
“What we’re watching is for the market to start discounting a lot of this negative news that is coming out of the jobs front and housing market.”
TIM GHRISKEY, CHIEF INVESTMENT OFFICER, SOLARIS ASSET MANAGEMENT, BEDFORD HILLS, NEW YORK:
“Pretty much right in line with expectations but very depressed.
“The important thing to remember is that Case-Shiller is a limited number of markets and the more depressed housing markets are heavily represented in the index.
“There are signs we believe that the decline in housing prices is slowing and we’re in a bottoming process but clearly this does show that housing prices continue to decline significantly, at least in the 10 major markets that Case-Shiller monitors.”
“It was not that far off of expectations. The markets are not really doing much on this — you saw a selloff in Treasuries before the data. Markets are sort of playing the thinness game rather than looking at what is going on with the data.”
“The numbers are certainly very bad. But we are seeing not much of a reaction in the currency market because this was the October report and the November data for existing and new home sales already told the story about the poor state of the U.S. housing market. But there is one silver lining though. The pace of the decline seems to have slowed during the month.”
MARKET REACTION: STOCKS: U.S. equity index futures little changed after data. BONDS: U.S. Treasury bond prices hold gains after data. DOLLAR: U.S. dollar remains lower versus major rivals.