US home price data through October 2009, released Tuesday by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to September and marked nine months of improved results, beginning in early 2009. Average US prices are at 2003 levels and the peak-to-trough fall in Las Vegas, is at -55.4% - - down to 2000. Also on Tuesday, US consumer confidence was reported to have risen in December.

The chart above depicts the annual returns of the 10-City and 20-City Composite Home Price Indices, declining 6.4% and 7.3%, respectively, in October compared to the same month last year. All 20 metro areas and both composites showed an improvement in the annual rates of decline with October’s readings compared to September.

“The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.”says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010."

As of October 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

San Francisco has reported seven consecutive months of positive returns, San Diego has reported six and Los Angeles and Phoenix are close behind with five. While the two Composites were flat, seven of the MSAs reported positive monthly returns for October and two of those -- Phoenix and San Francisco -- were greater than +1.0%. Looking at the annual statistics, both Minneapolis and Portland are no longer reporting double-digit declines. Denver and Dallas are nearing positive territory with their annual figures at -0.1% and -0.6%, respectively.

Las Vegas remains the one market that has not seen a glimmer of hope so far this year. Prices have declined for 38 consecutive months, with a peak-to-trough reading of -55.4%. It is now barely 5% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.

The table below summarizes the results for October 2009. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data. More than 22 years of history for these data series is available, and can be accessed in full by going here.

US Consumer confidence

The Conference Board Consumer Confidence Index, which had increased in November, rose again in December. The Index now stands at 52.9 (1985=100), up from 50.6 in November. The Expectations Index increased to 75.6 from 70.3 last month. The Present Situation Index, however, declined to 18.8 from 21.2 in November.

Says Lynn Franco, Director of the Conference Board Consumer Research Center: "Consumer Confidence posted yet another moderate gain in December as expectations for the short-term future increased to the highest level in two years (Index 75.8, Dec. 2007). The Present Situation Index, however, continued to lose ground and remains at a 26-year low (Index 17.5, Feb. 1983). A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index. Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010."

Consumers' assessment of current-day conditions declined further in December. Those claiming business conditions are "bad" increased to 46.6% from 44.5%, while those claiming conditions are "good" decreased to 7.0% from 8.1%. Consumers’ appraisal of the job market was mixed. Those claiming jobs are "hard to get" decreased to 48.6% from 49.2%, while those claiming jobs are "plentiful" decreased to 2.9% from 3.1%.

Consumers' short-term outlook improved in December. Those anticipating business conditions will improve over the next six months increased to 21.3% from 19.7%, while those expecting conditions will worsen decreased to 11.9% from 14.6%.

The outlook for the labour market was also more upbeat. The percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2% from 15.8%, while those expecting fewer jobs decreased to 20.7% from 23.1%. The proportion of consumers anticipating an increase in their incomes decreased to 10.3% from 10.9%.

The Consumer Confidence Survey is based on a representative sample of 5,000 US households. The monthly survey is conducted  by polling firm TNS and the cutoff date for December’s preliminary results was December 21st