Tuesday, September 24 16:07:42
U.S. home prices gained in July even as a dip in consumer confidence this month underscored the potential for higher interest rates and a sluggish economy to dent a housing market recovery.
The S and P/Case Shiller composite index of 20 metropolitan areas rose 0.6 percent on a seasonally adjusted basis, a little slower than the 0.8 percent gain economists in a Reuters poll had expected.
Year-over-year, home prices in all 20 cities have gained, with Las Vegas surging 27.5 percent.
Despite the gains, analysts noted that home prices remained off their pre-crisis era peaks.
"Home prices still have a long way to go before home prices are back to levels that predated the collapse of the housing market," wrote Thomas Simons, a money market economist at Jefferies, in a note to clients.
Data from the U.S. Federal Housing Finance Agency showed U.S. home prices rose 1 percent in July from June.
Economists are worried that a jump in interest rates will put off homebuyers. The yield on the benchmark 10-year Treasury has surged more than 100 basis points since May, when Federal Reserve policymakers began hinting at an exit from crisis-era measures to prop up the world's biggest economy.
But last week the U.S. central bank surprised markets by keeping its $85 billion of buying in Treasuries and mortgage-backed securities in place, pointing to worries about the economy, including employment.
The still-sluggish economy could weigh on consumers as well.
Consumer confidence slipped in September, according to a private sector report. The Conference Board, an industry group, said its index of consumer attitudes fell to 79.7 from a revised 81.8 in August, compared to economists' expectations for 79.9.
"Consumer confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed," said Lynn Franco, director of economic indicators at the Conference Board, in a statement.
"While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead." ( C ) Reuters