U.S. home prices plunged at a record pace in December, data showed on Tuesday, while consumer confidence also hit a record low in February as Americans feared an already deep recession was likely to get even worse.
Prices of U.S. single-family homes fell 18.5 percent in December from a year earlier, with the pace of decline speeding up, according to the S&P/Case Shiller home price index.
That was the biggest drop since the data series began 21 years ago and suggested prices will probably continue falling in the months ahead, extending a 13-month-old recession.
The composite index of home prices in 20 metropolitan areas fell 2.5 percent after dipping 2.3 percent in November.
There are very few, if any, pockets of turnaround that one can see in the data, said David Blitzer, chairman of S&P's index committee. Most of the nation appears to remain on a downward path.
Adding to the gloom was data showing U.S. consumers' mood and outlook for the future continued to deteriorate this month. The Conference Board, an industry group, said its sentiment index fell to 25.0 in February, the lowest since the index began in 1967, from 37.4 in January.
U.S. stocks retreated from session highs after the confidence data while Treasury debt prices rose.
Americans surveyed by The Conference Board were anxious about the job market, and the index showed most expect conditions to worsen over the next six months.
In testimony before Congress on Tuesday, Federal Reserve Chairman Ben Bernanke said that unless government efforts helped restore financial stability, the U.S. recession may not end this year.
Bernanke's assertion that we won't get a full recovery for two to three years is pretty downbeat, said Cary Leahey, economist at Decision Economics in New York.
The U.S. economy has shed more than 3 million jobs since the beginning of 2008.
Many analysts fear that Bernanke may be correct, especially since the housing market, which was at the epicenter of the financial crisis that began in mid-2007, does not look likely to improve soon.
The S&P/Case Shiller data showed that prices have plummeted 26.7 percent from the housing market peak in the second quarter of 2006.
Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut, said a rising jobless rate, limited access to credit and an overhang of unsold homes will conspire to keep prices headed lower in the months ahead, and keep potential buyers on the sidelines.
Cheap just does not do it, at least while expectations that it will get cheaper are entrenched, he said.
(Additional reporting by Al Yoon, Chris Reese and Ellis Mnyandu; Editing by James Dalgleish)