The pace of decline in US home prices moderated in April, while consumers this month turned more gloomy amid jitters about the labour market and economic outlook, data showed today.
The housing data suggested the start of the spring buying season helped, though economists cautioned home prices will likely continue to crawl along at low levels, and could have further to fall, as the battered housing market works through a slew of headwinds.
Average home prices fell from a year ago and were still at levels seen in the summer of 2003.
"The pace of decline seems to be slowing some, so that is good. We have to do that before you can actually start increasing," said Mike Feroli, economist at JP Morgan in New York.
"I would expect prices are flattish in the second half (of 2011), and it may be a while before we see positive growth of any significance."
The S&P/Case-Shiller composite index of single-family homes in 20 metropolitan areas dipped 0.1 per cent month-over-month on a seasonally adjusted basis. A Reuters poll of economists had forecast a decline of 0.2 per cent.
On a non-seasonally adjusted basis, however, the index rose 0.7 per cent, its first advance in eight months, the report said.
"The seasonally adjusted numbers show that much of the improvement reflects the beginning of the spring-summer home buying season," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.
"It is much too early to tell if this is a turning point or simply due to some warmer weather."
Prices in the 20-city index fell 4 per cent year over year, slightly worse than expectations for a drop of 3.9 per cent.
An excess amount of houses for sale, ongoing foreclosures, tight credit and weak demand have all kept the housing market on the ropes even as other areas of the economy begin to recover.
The report helped give US stocks a boost, as did optimism the Greek parliament would adopt an unpopular austerity plan needed to avert the euro zone's first default.
Separate data showed consumer confidence fell in June to the lowest point since November on concerns about the slack labour market and sputtering recovery.
The Conference Board, a private-sector industry group, said its index of consumer attitudes fell to 58.5 in June from a revised 61.7 in May, and short of expectations for 60.5.
"Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully," Lynn Franco, director of the Conference Board Consumer Research Centre, said in a statement.
Data yesterday also gave a sour picture of the consumer. Consumer spending was flat in May from April, breaking a string of 10 straight months of gains, as households struggled with rising prices and automakers could not deliver the models Americans wanted.
Reuters
