U.S. August home prices
rise 5.1 percent from year ago; consumer confidence
slips in October
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[October 26, 2016]
YORK (Reuters) - U.S. home prices rose 5.1 percent in the year to August
as home buyers competed for fewer properties, helped by low mortgage
interest rates, some wage growth and low unemployment.
The S&P CoreLogic Case-Shiller report published on Tuesday said its
20-city index was up 5.1 percent, after a rise of 5.0 percent in the
year to July. The national index has now almost recovered to the record
high set in July 2006 before the financial crisis of 2008.
"All 20 cities saw prices higher than a year earlier with 10 enjoying
larger annual gains than last month," David Blitzer, managing director
and chairman of the Index Committee at S&P Dow Jones Indices, said.
The acceleration in home price inflation comes after other signs the
housing recovery is gaining strength.
Sales of existing U.S. homes increased 3.2 percent in September from
August, but the number of homes for sale has fallen nearly 7.0 percent
from a year ago, the National Association of Realtors said last week.
Just 2.04 million existing homes were for sale in September.
Building of new single-family houses rose 8.1 percent in September, in
data published earlier by the Commerce Department, although the annual
rate of 783,000 starts remains well below the historical average of more
than one million annual rate of new home building.
"Demand is high and enthusiasm for homeownership remains strong,
especially among all-important young, minority and would-be first-time
buyers," Svenja Gudell, chief economist at real estate data provider
Case-Shiller's national index, after seasonal adjustment, rose 0.6
percent month-over-month in August, while the 10-city and 20-city
indexes rose 0.2 percent.
Portland, Seattle and Denver reported the strongest year-over-year
increases for the seventh month in a row, with gains of 11.7 percent,
11.4 percent and 8.8 percent, respectively, as buyers were forced out of
the expensive Silicon Valley area in California.
After the financial crisis of 2008, home prices plunged 35 percent from
their peak in July 2006 until they bottomed out in March 2012. They have
since risen to just 7.2 percent below the peak.
CONSUMER CONFIDENCE SLIPS
Consumers' perceptions of both current conditions and the six-month
outlook dimmed in October, with the U.S. Conference Board's confidence
index slipping to 98.6 in October, down from 103.5 in September.
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A "For Sale" sign is seen outside a home in Cardiff, California
February 22, 2016. REUTERS/Mike Blake/File Photo
Economists expected the index to hit 101.5 in October, according to a Thomson
Reuters consensus estimate.
The survey, a closely followed barometer of consumer attitudes, measures
confidence toward business conditions, short-term outlook, personal finances and
"Consumer confidence retreated in October, after back-to-back monthly gains,"
said Lynn Franc, director of economic indicators at The Conference Board.
"Consumers' assessment of current business and employment conditions softened,
while optimism regarding the short-term outlook retreated somewhat. However,
consumers' expectations regarding their income prospects in the coming months
were relatively unchanged."
Monthly U.S. job growth slowed to an average 161,000 in August and September
after gains in the previous two months and is averaging 178,000 this year, down
from 229,000 in 2015.
However, unemployment remained low at 5.0 percent in September.
The Conference Board report also said the present situation index, which
measures overall consumer sentiments toward the present economic situation,
decreased to 120.6 from 127.9 in the prior month. The Expectations Index, which
measures sentiments for the next 6-months, declined to 83.9 from 87.2 in
(This version of the story , corrects organization name to "Zillow" in the 7th
(Writing by Clive McKeef; Editing by Chizu Nomiyama)
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