US morale falls but house prices gain
US HOME prices edged higher for the second month in a row in March as the housing recovery picked up traction, while gains in some of the hardest hit areas suggested the improvement was becoming more broad-based.
But consumer confidence cooled in May to its lowest level in four months, separate data showed yesterday, as Americans turned gloomy about the job market and the economic outlook.
The closely watched S&P/Case Shiller composite home price index of 20 metropolitan areas gained 0.1 per cent in March on a seasonally adjusted basis, though it fell shy of economists’ forecasts for a gain of 0.2 per cent.
The housing market has been a thorn in the side of the broader economic recovery but the sector has been gathering momentum with new construction and sales rising in April.
“In my mind there is no question that housing has bottomed, in terms of home sales, home construction and home prices, but the recovery is still going to be very modest or very sluggish,” said Mark Vitner, senior economist at Wells Fargo Securities,
Prices in the 20 cities fell 2.6 per cent from a year ago, an improvement from the 3.5 per cent yearly decline seen last month.
Meanwhile a report from industry group the Conference Board showed consumer confidence fell to its lowest level since the start of the year, making for the third month of declines.
The index of consumer attitudes fell to 64.9 from a downwardly revised 68.7 the month before, confounding expectations for a gain to 70.0.