Economy: Consumer Confidence Rises to Highest Since July 2001, Home Prices Climb
Consumer confidence unexpectedly increased in February to the highest level since July 2001, according to a report Feb. 28 from the New York-based Conference Board. The group’s gauge rose to 114.8, from 111.6 in January.
The median forecast in a Bloomberg survey of economists called for 111.
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Home prices in 20 U.S. cities rose in the 12 months through December at the fastest pace in almost a year, while nationwide the gain in values was the biggest since 2014, according to S&P CoreLogic Case-Shiller data reported Feb. 28.
Key Points
• 20-city property values index advanced 5.6% from December 2015 (forecast was 5.4%) after climbing 5.2% in the year through November.
• National home-price gauge climbed 5.8% in the 12 months through December, the most since June 2014.
• The seasonally adjusted 20-city measure rose 0.9% from a month earlier (forecast was 0.7%)
Big Picture
A limited number of listings is keeping home values elevated as buyers compete for properties. Figures Monday from the National Association of Realtors showed contract signings for existing homes dropped last month as higher housing prices and a pickup in mortgage rates made purchases less affordable. Nonetheless, solid hiring and a nascent gain in incomes will probably keep potential homebuyer traffic elevated and underpin sales.
Economist Takeaways
“Home prices are rising, but the speed is not alarming,” David Blitzer, chairman of the S&P index committee, said in a statement. “One factor behind rising home prices is low inventory.”
The Details
• All 20 cities in the index showed a year-over-year gain, led by a 10.8% advance in Seattle and a 10% increase in Portland, Oregon.
• After seasonal adjustment, Chicago had the biggest month-over-month gain at 1.5%; Seattle and Tampa each posted 1.4% increases.
