Wednesday, August 26, 2009

US housing data brings cheer, confidence up

NEW YORK: There was good news on the economic front for the United States.

Latest data showed that prices of single-family homes in the US rose for the second consecutive month in June, exceeding expectations and adding to evidence that the three-year housing slump is easing.

A separate set of data yesterday indicated that US consumers have more confidence in the economy than earlier thought.

In the housing survey, Standard & Poor's/Case-Shiller composite indexes of 10 and 20 metropolitan areas both rose 1.4 per cent in June from May, almost three times the 0.5 per cent increases of the month before. May's increases were the first in nearly three years.

Optimism over a housing recovery blossomed last week after reports showed rising confidence among homebuilders, and sales of existing homes rose last month for the fourth consecutive month.

Economists expect the sector's recovery could help the nation emerge from recession and further stabilise financial markets that have suffered their worst crisis since the 1930s.

'This is just another month that supports those who think we have bottomed, or are nearing a bottom,' said Mr Jesse Litvak, a managing director in mortgage- and asset-backed securities at Jefferies & Co in Stamford, Connecticut.

S&P said its US National Home Price Index recorded a 14.9 per cent decline for the second quarter, compared with a 19.1 per cent year-over-year drop in the first quarter. Versus the first quarter, prices rose by 2.9 per cent in the first such increase in three years, S&P said.

Meanwhile, US consumer confidence rose more than expected this month after two consecutive months of declines, buoyed by a jump in recovery hopes for the coming months, the Conference Board said yesterday.

The business research firm said its consumer confidence index climbed to 54.1 this month from an upwardly revised 47.4 last month.

The rebound in confidence was stronger than the 47.9 reading that most analysts had expected.

'Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend,' said Ms Lynn Franco, research director at the Conference Board.

Source, Straits Times, 26 Aug 2009

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