G.O.O.D

Source: Bloomberg.com

Home prices in 20 U.S. metropolitan areas fell at a faster pace in May, and consumer confidence stayed near the lowest level since 1992 this month, posing a threat to household spending.

The S&P/Case-Shiller home-price index dropped 15.8 percent from a year earlier, the biggest decline since records began seven years ago. The Conference Board’s confidence index rose to 51.9, from 51 in June.

Home prices have fallen every month since January last year, eroding household wealth at a time when consumers are trying to cope with record fuel costs and the credit crunch. While both of today’s figures were higher than economists’ estimates, the reports still underscored forecasts for spending to slow in the second half as the stimulus from tax rebates wanes.

“It’s definitely too early to break out the confetti,” said Michael Feroli, an economist at JPMorgan Chase & Co in New York and a former researcher at the Federal Reserve.

“Household wealth is declining, and that should restrain consumer spending.”

This entry was posted on Tuesday, July 29th, 2008 at 4:11 pm and is filed under Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.