US house prices continue to fall

Subject: US house prices continue to fall Tue Jun 24, 2008 7:34 pm

US house prices fell further in April, with every top city showing annual losses, many with double-digit declines, new figures showed yesterday.

The Standard & Poor's/Case-Shiller index of 20 cities fell 1.4% between March and April, and by a record 15.3% year on year. The figures were better than expected, though - it had been forecast to fall 2% on the month and 15.9% on the year. S&P said its index of 10 cities fell 1.6% in April, making a record 16.3% annual drop. Home prices in 12 areas have fallen for eight consecutive months.

Meanwhile, the Conference Board said US consumer confidence fell in June to its lowest level in 16 years - despite the arrival of tax rebates - as high inflation continued to sap confidence.

The index plummeted to 50.4 from 58.1, while the expectations index dropped to 41.0 from 47.3. The current conditions index fell to 64.5, from 74.2. Those saying jobs were "hard to get" rose to 30.5% from 28.3% in May, while those claiming jobs were "plentiful" fell to 14.1% from 16.1%.

Paul Ashworth, of Capital Economics, said: "Surging gasoline prices, falling house prices and rising joblessness still have households in an unbelievably gloomy mood. Nevertheless, the actual sales figures suggest that consumers are continuing to spend."

Nariman Behravesh, of Global Insight, said of house prices: "The pace of the price drops seems to be slowing a little bit, which suggests we may be approaching a bottom ... the market has other things on its mind, mainly oil prices, inflation and what the Fed's going to do. It's almost like the housing and sub-prime crisis are old news."

The US treasury secretary, Henry Paulson, said that despite costly energy, the US economic fundamentals were sound. "Hopefully, the biggest part of the housing decline will be over by the end of the year."

http://www.guardian.co.uk/business/2008/jun/25/housingmarket.usa
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