Single-family home prices fell more than expected in November, highlighting a sector that continues to struggle to make a meaningful recovery, a closely watched survey showed on Tuesday.
RICK BENSIGNOR, CHIEF MARKET STRATEGIST AT MERLIN SECURITIES
IN NEW YORK
Futures didn't really move, and I'm not sure there's much to say about it. There was a hairline of a minor revision from last month. With everything going on in Europe, this won't be a factor for trading.
ANDREW WILKINSON, CHIEF ECONOMIC STRATEGIST, MILLER TABAK &
CO, NEW YORK
It's not telling us much we don't know. A lot of people fell into the trap of looking at the upturn in housing starts at the end of the year and mistaking that for a turnaround in the housing market. That's absolutely premature.
JOE MANIMBO, SENIOR MARKET ANALYST, TRAVELEX GLOBAL
That does point to continued weakness for a sector that has long held back the broader economy. I think it really only justifies the Fed's low rate guidance for a longer period of time. So that's going to put the focus on some manufacturing numbers this week as well as employment to cement that view. That only keeps the door open to a third round of quantitative easing. That is another issue that has been weighing on the dollar.
CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK
It's a little bit deeper decline than expected. It does matter, and the reason it does is the consensus view was that the rate of decline in home prices was slowing and in fact what we've seen at the end of the year is that the rate of decline in home prices is accelerating.
That trend goes back for a while. I think it's appropriate to view today's Case Shiller data in the wider picture of economic data. In the fourth quarter there were a few indicators -- including jobless claims -- suggesting the economy was shifting into higher gear but in January we've gotten a lot of data to suggest the opposite.
The data in January suggests the economy is stuck in low gear. Probably the most important is the consumer spending numbers, especially because the fourth quarter, we thought, was marked by decent consumption. What happened was consumers did increase spending on some things like electronics but thy did it by cutting back in other areas.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON
Although housing reports towards the end of 2011 indicated a less dire market was forming with construction activity, builder confidence, and home buying on the rise, the S&P/Case-Shiller HPIs measured even larger declines in November home values, as 20-city index fell 3.7% from November 2010, which is an extension from October's annual decline of 3.4%. This compares to expectations of a fall of 3.3%. The 10-city HPI, down 3.6%, also represents deepening price falls as it was down a smaller 3.2% yr/yr in the last report.
The data shows that 13 of the 20 MSAs annual returns worsened and for the second month, 19 of the 20 MSAs experienced lower prices on a monthly basis. Both HPIs are down 1.3% from October (which correlates to SA decline of 0.7%) and are close to 33% below their 2006 peaks.
As of November, home values were similar to home prices seens in mid-2003.
(Americas Economics and Markets Desk)