Single-family Home Prices Tumble in March - Reuters
Reuters writer, Joanne Morrison, reviews the US single-home market using short term economic indicators to predict future trends for our housing market.
Prices of U.S. single-family homes plunged a record 14.4 percent in March from a year earlier, while consumer confidence slumped to its lowest in 16 years in May as gasoline prices surged.
The Standard & Poor’s/Case Shiller composite index of 20 metropolitan areas released on Tuesday showed prices of previously owned homes fell 2.2 percent in March, deepening their year-on-year decline.
Separately, the Conference Board said its consumer confidence index slumped to 57.2 this month from 62.8 in April as rising gasoline costs and falling home prices made Americans increasingly nervous both about current conditions and the future.
“In terms of prognosis, there remains no reason for the situation to stabilize and every reason for it to continue to deteriorate yet further with price declines accelerating,” said BNP Paribas economist Richard Iley, referring to the record declines in the S&P report.
Prices of U.S. Treasury securities fell on Tuesday, weighed by ongoing concerns about inflation amid persistently high energy prices. U.S. stocks ended higher with the Dow Jones industrial average up 68 points. The dollar rose against major currencies.
Falling home prices have led to a wave of foreclosures that is expected to grow worse before it gets better. The crisis in foreclosures, which pressure prices even lower, has spurred plans by regulators and lawmakers to keep borrowers in their homes by forgiving a portion of their loan principal.
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