A monthly survey released Tuesday shows consumers’ confidence in the economy in December surged to the highest level since April and was near a post-recession peak.
But a separate private report said home prices in most major cities in the United States fell for the second straight month in October.
The New York-based Conference Board said that its Consumer Confidence Index rose almost 10 points to 64.5, up from a revised 55.2 in November. Analysts had expected 59.
The surge builds on another big increase in November, when the index rose almost 15 points from the month before.
Improving confidence is in line with retail reports of a decent holiday shopping season. Still, the December confidence reading is below the 90 level that indicates an economy on solid footing.
Economists watch the confidence numbers closely because consumer spending — including items like health care — accounts for about 70 percent of economic activity in the United States.
Still, the Standard Poor’s/Case-Shiller index showed prices dropped in October from September in 19 of the 20 cities tracked, reflecting the typical autumn slowdown after the peak buying season.
Prices in a majority of cities declined for the second straight month. Before that, they had risen for five consecutive months in at least half of the cities tracked.
Atlanta, Detroit and Minneapolis posted the biggest monthly declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.
Prices rose in Phoenix after three straight monthly declines.
The Case-Shiller index covers cities that hold half of all homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The monthly data are not seasonally adjusted.
David M. Blitzer, chairman of S.P.’s index committee, said steep price drops in cities such as Atlanta, Chicago, Cleveland, Detroit and Minneapolis were particularly worrisome because their gains earlier this season were strong.
“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” Mr. Blitzer said. “These markets were some of the strongest during the spring/summer buying season.”
Americans are generally reluctant to purchase a home more than two years after the recession officially ended. High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history haven’t been enough to lift sales.
Sales of previously occupied homes are barely ahead of 2008’s dismal figures, which were the worst in 13 years. And sales of new homes this year will likely be the lowest since the government began keeping records a half century ago.
Article source: http://feeds.nytimes.com/click.phdo?i=187edab596b23720ec735a7424bf734e
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