Prices of US single-family homes plunged a record 14.1 percent in the first quarter from a year earlier, marking a pace five times faster than the last housing recession, data showed on Tuesday. The Standard & Poor's/Case Shiller composite index of 20 metropolitan areas fell 2.2 percent in March from February and plummeted a record 14.4 percent from a year ago.
"There are very few silver linings that one can see in the data," David Blitzer, chairman of S&P's index committee, said in a statement. Consumer confidence slumped to its lowest in 16 years in May as rising gasoline costs and falling home prices made Americans nervous about the future, the Conference Board said.
But in April, sales of newly constructed single-family homes rose for the first time since October, Commerce Department data showed, and the inventory of new homes declined for the 12th straight month. US stocks rose but then turned mixed after the data. The dollar extended gains versus the euro and the yen.
Economists expected prices for the 20-city S&P/Case Shiller index to fall 2.0 percent on month and 14.0 percent from a year earlier, according to the median forecast in a Reuters survey. Falling home prices have become the scourge of the housing market that is seeing its worst downturn since the 1930s. Home values since last year have been dropping below balances owed on many mortgages, leaving borrowers with no equity and more likely to succumb to foreclosure.
The crisis in foreclosures, which pressure prices even lower, has spurred numerous plans by regulators and lawmakers that aim to keep borrowers in their homes by forgiving a portion of their loan's principle. Housing markets that grew the most during the housing boom, such as Las Vegas, Nevada and Miami, Florida, are leading the decline, S&P said.
S&P said its composite index of 10 metropolitan areas declined 2.4 percent in March, for a record 15.3 percent year-over-year drop. US sales of newly constructed single-family homes rose 3.3 percent in April to a 526,000 annual rate but they were down 42 percent from a year ago, which was the largest year-over-year drop in nearly 27 years, Commerce Department data on Tuesday showed. The Commerce Department estimate showed the first increase in new home sales since October, but the increase came after a big downward revision to the prior month.
Economists polled by Reuters were expecting new home sales to slip to a rate of 520,000. The department revised down its March estimate to a rate of 509,000 from 526,000, or a 11.0 percent decrease from a first-reported 8.5 percent decline.
The inventory of homes available for sale in April fell 2.4 percent to 456,000, which was the 12th straight monthly decline. The April sales pace put the supply of homes available for sale at 10.6 month's worth. The Conference Board, an industry group, said its monthly measure of consumers' mood fell to 57.2 this month from 62.8 in April, well below Wall Street's median estimate of 60.0.
The index has dropped by almost half since last July, when housing market troubles triggered the most severe credit crisis in at least a decade. Inflation expectations rose to an all-time high 7.7 percent, well above April's 6.8 percent. The pain was felt across the board, with consumers worried about both what is happening now and what might be to come. The present situation index dropped to 74.4 from 81.9, while the expectations barometer fell to 45.7 from 50.0.
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