The economy is still a mess

Home Prices drop again

. . . For November, the Case-Shiller index of 10 major metropolitan areas and the 20-city index both fell 1.3% from the previous month. David M. Blitzer, chairman of the index committee at S&P Indices, also noted that 19 of the 20 major U.S. metropolitan markets covered by the indices in November saw prices decline from October.

"The only positive for the month was Phoenix" . . . .

The 10-city and 20-city composites posted annual returns of negative 3.6% and negative 3.7%, respectively, versus November 2010. At negative 11.8%, hard-hit Atlanta continued to post the lowest annual return. . . .

People can't get financing for new home purchases.

Falling homeownership — and prices — reflect the worst housing downturn since the Great Depression. And while there are signs that the housing industry's downturn may at least be nearing a bottom, the impact of the collapse will be evident for years to come, economists say.
As of November, average U.S. home prices were back to mid-2003 levels, S&P says.
"Americans are less keen on homeownership knowing now that prices can fall," says Paul Dales, economist with Capital Economics.
Even if people want to own a home, they may not be able to, given the difficulty in getting financing for a mortgage, Dales says. The National Association of Realtors says many purchase contracts appear to be falling through for that reason.
Many economists expect home prices to continue to fall this year and maybe into next year before stabilizing and then showing little or no appreciation for some time.
"The trend is down, and there are few, if any, signs in the numbers that a turning point is close at hand," says David Blitzer, chairman of S&P's index committee. . . .

Consumer Confidence Plummets

U.S. consumer confidence in January gave back some of the huge gains posted in the previous two months, according to a report released Tuesday. Views on labor markets darkened.

The Conference Board, a private research group, said its index of consumer confidence retreated to 61.1 this month from a revised 64.8 in December, first reported as 64.5. The January index was far less than the 68.0 expected by economists surveyed by Dow Jones Newswires.

The fallback was concentrated in consumers’ view of the current economy. The present situation index, a gauge of consumers’ assessment of current economic conditions, dropped to 38.4 in January from a revised 46.5, originally reported as 46.7.

Consumer expectations for economic activity over the next six months slipped only slightly, to 76.2 in January from a revised 77.0, first reported as 76.4.

“Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects." . . . .

Perceptions about the job markets worsened this month. The survey showed 43.5% think jobs are “hard to get” up from 41.6% saying that in December, while only 6.1% think jobs are “plentiful” down from 6.6% in December. . . .