US confidence slumps

Consumer confidence in the United States has slumped to a five year low.

And US house prices are still falling sharply.

This news hit early trading on Wall Street, although there were signs of a recovery later in the day.

A Conference Board report showed consumer confidence in the US falling to 64.5 this month from 76.4 in February.
A quarter of those surveyed expected businesses conditions to worsen in the next six months. And nearly a third said the economy would have fewer jobs.

Fewer consumers plan to purchase big-ticket items like refrigerators and television sets, and more than half said that employment was currently “not so plentiful.”

Home prices across America also continue to fall record rates.

The value of single-family homes plummeted 10.7 percent in January compared with a year earlier, according to the Case-Shiller index. This is  a closely watched survey of 20 major metropolitan regions.

This was the steepest year-over-year decline since the index began eight years ago.

Economists said the slump was probably worse than at the height of the last US housing recession in the early 1990s.

There is some hope that the sharp fall in house prices might help to lure buyers back into the market.

Right now, though, sellers are still struggling under a wave of foreclosures.

And a tight credit market that has made it more difficult for many Americans to take out mortgages.

US housing stocks have ballooned as purchases have dried up, while buyers waitecd for prices to fall even further.

The decline in housing prices has been compounded by a general sense of gloom about the economy.

However, there was one bright spot.

Sales of previously owned homes ticked up last month,according to the National Association of Realtors, ending a six-month streak of declines.

The positive sales figure led some analysts to suggest that the housing market is approaching its bottom.

But economists are sceptical.  They predict that prices will fall for several more months before sales pick up in earnest.