Wednesday, 26 September 2007

Housing & Consumer Confidence slide in August

With sales of existing homes falling 4.3% to a five-year low seasonally adjusted annual rate of 5.50 million in August, inventories of unsold single-family homes rose to an 18-year high.

Meanwhile, a separate gauge of home prices fell for the 12th straight month in July, with prices falling in 15 of 20 major cities over the past year. Prices in 10 major cities are falling at the fastest pace in 16 years.

Consumers are getting more worried about the economy. The consumer confidence index fell sharply for a second straight month, hitting depths not seen since Hurricane Katrina struck two years ago, the Conference Board reported in yet another report. The consumer confidence index fell to 99.8 in September from a revised 105.6 in August
A point to remember about existing home sales is that the numbers are based on closings, so the decision to buy could have been made as far back as June. Thus we can expect existing sales to tank further as the numbers catch up with current market conditions.

To hear why Robert Shiller - the co-creator of the Case-Shiller Home price index, thinks that the worst in the Housing recession is yet to come click on the this link.