US city home price growth continued to slow in August according to the latest S&P/Case-Shiller Home Price Indices for August 2014. Meanwhile, the Conference Board Consumer Confidence Index, which had dropped in September, rebounded in October. The Index now stands at 94.5 (1985=100), up from 89.0 in September. The Present Situation Index edged up from 93.0 to 93.7, while the Expectations Index increased sharply to 95.0 from 86.4 in September.
The 10-City Composite rose 5.5% year-over- year and the 20-City 5.6%, both down from the 6.7% reported for July. The National Index gained 5.1% annually in August compared to 5.6% in July.
On a monthly basis, the National Index and Composite Indices showed a slight increase of 0.2% for the month of August.
Detroit prices rose 0.8%, followed by Dallas, Denver and Las Vegas at 0.5%. Gains in those cities were offset by a fall of 0.4% in San Francisco followed by declines of 0.1% in Charlotte and San Diego.
“The deceleration in home prices continues,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities -- Los Angeles, San Francisco and San Diego. Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month.
“The large extent of slower increases is seen in the annual figures with all 20 cities; the two composites and the national index all revealing lower numbers than last month. The 10- and 20-City Composites gained 5.5% and 5.6% annually with prices nationally rising at a slower pace of 5.1%. Las Vegas continues to see a sharp deceleration in their annual home prices with a 10.1% annual return, down just below three% from last month. Miami is now leading the cities with a 10.5% year-over-year return. San Francisco, which has shown double-digit annual gains since November 2012, posted an annual return of 9.0% in August.
“Despite softer price data, other housing data perked up. September figures for housing starts, permits and sales of existing homes were all up. New home sales and builders’ confidence were weaker. Continued labour market gains, low interest rates and slower increases in home prices should support further improvements in housing,” Blitzer said.
The consumer confidence survey showed that consumers’ appraisal of current conditions was moderately more favourable in October than in September. Their view of business conditions was mixed; while the proportion saying conditions are “good” inched up from 24.2% to 24.5%, those claiming business conditions are “bad” also increased slightly, from 21.2% to 21.7%. Consumers’ assessment of the job market improved moderately, with the proportion stating jobs are “plentiful” increasing marginally from 16.3% to 16.5%, and those claiming jobs are “hard to get” declining slightly from 29.4% to 29.1%.
Consumers’ optimism, which had declined considerably in September, improved in October. The percentage of consumers expecting business conditions to improve over the next six months increased from 19.0% to 19.6%, while those expecting business conditions to worsen fell from 11.4% to 9.3%. Consumers’ outlook for the labor market also improved markedly. Those anticipating more jobs in the months ahead increased to 16.8% from 16.0%, while those anticipating fewer jobs fell from 16.9% to 13.9%. The proportion of consumers expecting growth in their incomes rose from 16.9% in September to 17.7% in October, while the proportion expecting a drop in income fell from 13.4% to 11.6%.