U.S. Home Prices Weakened in August

Editor’s Note: This is an illusion caused by Wall Street. As long as fraudulent hang over the market, as long as consumers keep getting battered, as long as we pretend that those mortgages are real and not just some pawn in a larger scheme of fraud, we will see home prices weaken. who can buy when they can’t sell? How can you sell if your title isn’t clear? Where are the homeowner options of the modifications and short-sales are off the table because it will cost the mega banks billions to fess up to the truth about fair market asset values applied to homes and those absurd “mortgage bonds” that never really existed?

The truth is our policy at all levels, and the controlled narrative from Wall Street is keeping us from valuing the mega banks the way they should in a free market. Suddenly the “free market” enthusiasts are silent when it comes to the mega banks. Those companies are not worth much more than the paper on which they they scribbled values of mortgage bonds and credit default swaps. Homeowners, taxpayers, and investors who purchased the shadow bonds are paying the price for the lies of Wall Street. The effect is to prop up an illusion, a bubble that must eventually burst.

You want to see it different? Let the chips fall where they should. Victims should not be punished for being duped — investors, taxpayers or homeowners. Perpetrators should not be rewarded for achieving unwieldy size riding a wave of lies of their own creation. Let the stolen wealth be returned to those victims, as much as possible, and watch the practical effects of a middle class that has money again, government treasuries whose deficits become manageable, and the economy, innovation, government services and the moral high-ground reach back into our world and out of the economic morass created by Wall Street.

October 26, 2010

Index Shows That U.S. Home Prices Weakened in August


Americans’ confidence in the economy rose only slightly in October from September, even as home prices remained weak in August.

The weak outlook for consumer confidence comes in the face of a rebounding stock market and underscores challenges retailers face as they prepare for the holiday shopping season, which is expected to see only modest gains.

The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September. Economists surveyed by Thomson Reuters expected a reading of 49.2.

September’s index marked its lowest since February and was sharply down from 53.2 in August.

It takes a reading of 90 to indicate a healthy economy, a level not approached since the recession began in December 2007. Economists watch confidence closely because consumer spending accounts for about 70 percent of economic activity and is critical to a strong rebound.

The index, which measures how shoppers feel about business conditions, the job market and the next six months, had been recovering fitfully since hitting a low of 25.3 in February 2009.

In October 2009, the index stood at 48.7. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved to be the only exception at 62.7, but even that is weak.

One barometer of the Consumer Confidence Index, which measures how shoppers feel now about the economy, increased slightly to 23.9 in October from 23.3. The other measure, which assesses consumers’ outlook over the next six months, improved to 67.8 from 65.5.

“Consumers continue to be quite concerned about the short-term outlook,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “Both present and future indicators point toward more of the same in the coming months.”

Meanwhile, home prices are weakening around the country, even in metro areas that were showing strength earlier in the year.

The Standard & Poor’s Case-Shiller 20-city home price index fell 0.2 percent in August from July. Fifteen of the cities showed monthly price declines. Prices are expected to drop further in the coming months.

The biggest drop was in Phoenix, where prices fell 1.3 percent from a month earlier. Prices in San Francisco and Los Angeles, which had been increasing, both fell in August from July.

Detroit, Chicago, Washington, New York and Las Vegas were the only cities to show monthly increases.

The 20-city index has risen 6.7 percent from their April 2009 bottom. But it remains nearly 28 percent below its July 2006 peak. On a seasonally adjusted basis, the index fell 0.3 percent in August from July, but the S.& P. announced earlier this year that the unadjusted numbers were a more reliable indicator.

The 20-city index has risen 6.7 percent from its April 2009 bottom. But it remains nearly 28 percent below its July 2006 peak.

Home prices rose in many markets from April through July. But those increases were mostly fueled by government tax credits, which have expired. Now that the peak buying season is over, a record number of foreclosures, job concerns and weak demand from buyers are pushing prices down.

Most experts expect roughly 5 million homes to be sold through the entire year. That would be in line with last year’s totals and just above sales for 2008, the worst since 1997.

5 Responses

  1. It is really a nice and helpful piece of info. I am glad that you shared this helpful information with us. Please keep us informed like this. Thank you for sharing.

  2. Tood
    Good thoughts. Most of these homes are only worth pennies on the dollar anyway. The banks loose nothing.

  3. Todd I think the banks are doing that. And it is still not working. They are not putting alot of REO’s back on the market.

  4. Banks could knock down maybe 1 out of 3 houses to make housing costs to go back up, just like the apple orchards did a few years back, knock out half your apple tree’s and that will create a demand for that product and also prices will go back up, sounds dumb? This would never happen though, just an far out opinion.

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