WASHINGTON — Home prices rose in December at a faster pace than the previous month, probably because of a much smaller number of homes for sale.
Other economic reports released Tuesday showed that activity in the services sector was expanding, while consumer confidence was ebbing. The Standard & Poor’s/Case-Shiller 20-city home price index, released on Tuesday, increased 4.5 percent in December compared with 12 months earlier.
That is up from 4.3 percent in November and the same as October’s annual increase. The small gain comes after price increases had slowed for 12 straight months. Americans are listing fewer homes for sale, pushing up prices and keeping many houses out of reach for would-be buyers.
Still, the smaller price gains are more sustainable and less harmful for potential buyers than last year’s double-digit increases. The number of homes for sale in December was equal to just 4.4 months of sales, the lowest level in nearly two years.Six months of supply is typical for a healthy housing market.
“The housing recovery is faltering,” said David M. Blitzer, chairman of the S.&P. index committee. “While prices and sales of existing homes are close to normal, construction and new home sales remain weak.” The Case-Shiller index covers roughly half of American homes.
The index measures prices compared with those in January 2000 and creates a three-month moving average. The December figures are the latest available. All 20 cities reported price gains compared with the year earlier. The biggest gains were in San Francisco, where prices rose 9.3 percent, and Miami, where they jumped 8.4 percent.
Chicago reported the smallest gain, at 1.3 percent. Sales of existing homes fell last year after two years of steady recovery. That has led many economists to forecast a rebound in sales in 2015, but so far there are few signs of it.
In January, existing home sales tumbled 4.9 percent to a seasonally adjusted annual rate of 4.82 million, the slowest pace in nine months, the National Association of Realtors said Monday. And the construction of new homes fell 2 percent in January, the Commerce Department said last week. Lower mortgage rates and strong job growth may yet spur more sales this year.
The average 30-year fixed mortgage rate was 3.76 percent last week, according to the mortgage giant Freddie Mac. That has risen in recent weeks, but is far below the 4.33 percent average from a year ago. Employers have ramped up hiring, encouraged by strong growth last spring and summer.
The United States economy added more than a million jobs from November through January, the fastest three-month pace in 17 years.
More Americans earning paychecks should eventually push home sales higher. In a separate report on Tuesday, the Conference Board reported that its consumer confidence index dropped this month to 96.4 from a revised 103.8 in January.
The February and January readings are the highest since before the recession officially started in December 2007.
According to the index, consumers are modestly less confident about current economic conditions, considerably less confident about the next six months, and they are slightly more likely to say jobs are “hard to get” than they were in January. A year ago, the consumer confidence index was 78.3.
The rising confidence over the past year reflects in part the stronger job market. Consumers’ spirits have also risen as gasoline prices have plummeted — to $2.31 a gallon from $3.42 a year ago. Still, gas prices are up from $2.04 a gallon a month ago, according to AAA.
Consumer confidence measures “remain at inspiring levels,” Bricklin Dwyer, an economist at BNP Paribas, wrote in a research report on Tuesday.
“We continue to expect consumer spending to kick the year off on a robust foot after the drop in energy prices gave consumers a substantial windfall.” United States economic growth slowed to a solid, but unspectacular, 2.6 percent annual pace in the last three months of 2014.
Economists say the economy is likely to grow about 2.5 percent from January through March. In other data, the United States services sector expanded in February at its fastest pace since October, with businesses reporting more orders because of improving economic conditions.
The financial data firm Markit said its preliminary reading of its Purchasing Managers Index for the service sector rose to 57.0 in February from 54.2 in January.
“While parts of the East Coast have struggled in the face of adverse weather, other regions basked in unusually warm temperatures, boosting business above seasonal norms,” said Chris Williamson, chief economist at Markit, in a statement. “Activity levels surged higher and inflows of new business boomed as a result.”
nytimes.com
Other economic reports released Tuesday showed that activity in the services sector was expanding, while consumer confidence was ebbing. The Standard & Poor’s/Case-Shiller 20-city home price index, released on Tuesday, increased 4.5 percent in December compared with 12 months earlier.
That is up from 4.3 percent in November and the same as October’s annual increase. The small gain comes after price increases had slowed for 12 straight months. Americans are listing fewer homes for sale, pushing up prices and keeping many houses out of reach for would-be buyers.
Still, the smaller price gains are more sustainable and less harmful for potential buyers than last year’s double-digit increases. The number of homes for sale in December was equal to just 4.4 months of sales, the lowest level in nearly two years.Six months of supply is typical for a healthy housing market.
“The housing recovery is faltering,” said David M. Blitzer, chairman of the S.&P. index committee. “While prices and sales of existing homes are close to normal, construction and new home sales remain weak.” The Case-Shiller index covers roughly half of American homes.
The index measures prices compared with those in January 2000 and creates a three-month moving average. The December figures are the latest available. All 20 cities reported price gains compared with the year earlier. The biggest gains were in San Francisco, where prices rose 9.3 percent, and Miami, where they jumped 8.4 percent.
Chicago reported the smallest gain, at 1.3 percent. Sales of existing homes fell last year after two years of steady recovery. That has led many economists to forecast a rebound in sales in 2015, but so far there are few signs of it.
In January, existing home sales tumbled 4.9 percent to a seasonally adjusted annual rate of 4.82 million, the slowest pace in nine months, the National Association of Realtors said Monday. And the construction of new homes fell 2 percent in January, the Commerce Department said last week. Lower mortgage rates and strong job growth may yet spur more sales this year.
The average 30-year fixed mortgage rate was 3.76 percent last week, according to the mortgage giant Freddie Mac. That has risen in recent weeks, but is far below the 4.33 percent average from a year ago. Employers have ramped up hiring, encouraged by strong growth last spring and summer.
The United States economy added more than a million jobs from November through January, the fastest three-month pace in 17 years.
More Americans earning paychecks should eventually push home sales higher. In a separate report on Tuesday, the Conference Board reported that its consumer confidence index dropped this month to 96.4 from a revised 103.8 in January.
The February and January readings are the highest since before the recession officially started in December 2007.
According to the index, consumers are modestly less confident about current economic conditions, considerably less confident about the next six months, and they are slightly more likely to say jobs are “hard to get” than they were in January. A year ago, the consumer confidence index was 78.3.
The rising confidence over the past year reflects in part the stronger job market. Consumers’ spirits have also risen as gasoline prices have plummeted — to $2.31 a gallon from $3.42 a year ago. Still, gas prices are up from $2.04 a gallon a month ago, according to AAA.
Consumer confidence measures “remain at inspiring levels,” Bricklin Dwyer, an economist at BNP Paribas, wrote in a research report on Tuesday.
“We continue to expect consumer spending to kick the year off on a robust foot after the drop in energy prices gave consumers a substantial windfall.” United States economic growth slowed to a solid, but unspectacular, 2.6 percent annual pace in the last three months of 2014.
Economists say the economy is likely to grow about 2.5 percent from January through March. In other data, the United States services sector expanded in February at its fastest pace since October, with businesses reporting more orders because of improving economic conditions.
The financial data firm Markit said its preliminary reading of its Purchasing Managers Index for the service sector rose to 57.0 in February from 54.2 in January.
“While parts of the East Coast have struggled in the face of adverse weather, other regions basked in unusually warm temperatures, boosting business above seasonal norms,” said Chris Williamson, chief economist at Markit, in a statement. “Activity levels surged higher and inflows of new business boomed as a result.”
nytimes.com
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