S&P/Case-Shiller Report Keeps US Housing Recession On Track

Source: Daily FX

Ongoing foreclosures, rising mortgage rates and fading consumer confidence is leading Americans to further lower the asking price on their homes in an attempt to attract an ever contracting pool of potential buyers. The lagging S&P/Case-Shiller Composite 20 index fell 15.3 percent in April from the same period a year ago. And, while this was a more mild than expected drop in home values than economist had expected with a 16 percent consensus, the decline was still the largest in the indicators seven year history. Looking at the more active month-over-month reading, there was at least one promising nuance. The 1.36 percent decline in the 20-city index over the month extended a trend of steady declines from January 2007, but this was also the smallest monthly contraction in over half a year. However, as the economy is warped and shaped by rising unemployment and consumer sentiment at multi-decade lows as well as rising inventories from foreclosures and stricter lending regulation. On the other hand, this is a lagging indicators compared to the government's and National Association of Realtors' data; and the market is therefore less responsive.