U.S. single-family home prices fell for a fifth straight month in November and a double-dip in home prices could be confirmed by spring, a closely watched survey said on Tuesday.
KEY POINTS: * The Standard & Poor's/Case-Shiller composite index of 20 metropolitan areas declined 0.5 percent in November from October on a seasonally adjusted basis, though it was not as sharp as the 0.8 percent fall expected by economists. * Prices have fallen 1.6 percent in the past year, sharper than the 1.4 percent predicted by economists polled by Reuters.
URI LANDESMAN, PRESIDENT, PLATINUM PARTNERS IN NEW YORK:
Its definitely concerning. The two indicators that haven't been consistent with recovery are employment, which tends to be a lagging indicator, and home prices. I find it hard to believe that if we get a double dip in home prices we could get the consumer back in a meaningful way. Right now it seems like a coin toss as to whether that's likely. So I'm disappointed. And if you had told me two years ago that we'd still be at these levels, I would've been surprised.
If people feel good about earnings today, then traders will forget about this, but if they feel bad this will be another reason for the market to go down. We'll definitely correct at some point, and this may be the trigger to say we hit the peak of this run. I'd be very surprised if we go through 1,310 on this move.
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK:
The year-on-year rate was in line with expectations, and on a month-on-month basis it was a bit less negative than expected. We might be trying to form a bottom in terms of month-on-month.
Housing is in a state of gradual recovery and this doesn't really change that.
LINDSEY PIEGZA, U.S. ECONOMIST, FTN FINANCIAL, NEW YORK
This isn't necessarily the most exciting monthly report, but what we're going to continue to see is some price pressure in regional areas which will affect the overall indexes.
The market is still bouncing around on the bottom in that very tight range. It's not going to rebound; it's not going to drive growth...we have to start thinking about housing in a very different capacity when we talk about growth in the structure of our economy.
There's still a lot of pressure out there; there's still a lot of consumers that are under water on their mortgages. There still is a lot of pain although we get tired of talking about the housing market, it still very much is one of those negative components.
It's not going to be a big drag on growth either. It's only going to shave off one or two tenths from GDP, with an additional 5 percent or 10 percent price correction.
MARKET REACTION: STOCKS: U.S. stock index futures remained lower after the data. BONDS: U.S. Treasury bond prices held steady at higher levels. FOREX: The dollar held onto gains against the euro