Home prices show strength, but consumers unchanged

The latest S&P/Case-Shiller Home Prices Indices showed the fourth consecutive month of home price increases in July for the 10 and 20-city composites studied. Each category experienced a 0.9 percent increase in price from June to July 2011.

David Blitzer, chairman of the index committee at S&P Indices, said the July data showed monthly increases as well as improvements on the annual rates of change in home prices.

"This is still a seasonal period of stronger demand for houses, so monthly price increases are expected and were seen in 17 of the 20 cities," Blitzer said. "The better news is that 14 of 20 cities and both Composites saw their annual rates of change improve in July."

Despite home prices showing signs of stability, consumers in the market are remaining hesitant on large purchases. The Conference Board Consumer Confidence Index remained unchanged for September, after a sharp decline in August. The index is at 45.4, up slightly from 45.2 reported in August. In addition, the Present Situation Index decreased from 34.3 to 32.5, while the Expectations Index improved slightly from 52.4 in August to 54.0 in September.

Lynn Franco, director of The Conference Board Consumer Research Center, said the pessimism reported in August has carried over into September.

"However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending," Franco said. " In addition, consumers' assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak."

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