Economy Watch: Home Prices Still Rising; Consumer Confidence on a Roll; Mortgage Delinquencies Dip

By Dees Stribling, Contributing Editor

U.S. residential prices were not only up in April, according to the latest S&P/Case-Shiller Home Price Indices on Tuesday, they were up by record amounts. Home prices gained 11.6 percent and 12.1 percent for the 10- and 20-city composites indices in the 12 months ending in April 2013. From March to April, the 10- and 20-city composites rose 2.6 percent and 2.5 percent, respectively.

All 20 cities and both composites showed positive year-over-year returns for at least the fourth consecutive month. Atlanta, Dallas, Detroit and Minneapolis posted their highest annual gains since the start of their respective indices, S&P notes. Minneapolis turned in a record gain of 2.9 percent, while California markets are all seeing impressive increases, with gains ranging from 3.4 percent to 4.9 percent. Miami showed its largest annual increase, 2.4 percent, in more than seven years.

On a monthly basis, all cities with the exception of Detroit posted positive change. “The 10- and 20-city composites posted their highest monthly gains in the history of [the] indices,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. “Thirteen cities posted monthly increases of over two percentage points, with San Francisco leading at 4.9 percent.”

Consumer Confidence on a Roll

The Conference Board said on Tuesday that its Consumer Confidence Index, which had improved in May, spiked again in June. The index now stands at 81.4, up from 74.3 in May (the optimistic year 1985 = 100). The Present Situation Index increased to 69.2 from 64.8, while the Expectations Index improved to 89.5 from 80.6 last month.

Consumer Confidence increased for the third consecutive month and is now at its highest level since January 2008, before all of the recent economic unpleasantness. “Consumers are considerably more positive … than they were at the beginning of the year,” said Conference Board director of economic indicators Lynn Franco in a statement. “Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up.”

Consumers who say business conditions are “good” held steady at 19.1 percent, while those saying business conditions are “bad” decreased to 24.9 percent from 26 percent. Consumers’ appraisal of the job market was also more positive, with those claiming jobs are “plentiful” increasing to 11.7 percent from 9.9 percent, while those claiming jobs are “hard to get” edged up to 36.9 percent from 36.4 percent.

Mortgage Delinquencies Down

Lender Processing Services reported on Tuesday that the percentage of residential mortgages delinquent – over 30 days late, but not yet in foreclosure – was 6.08 percent in May, down a considerable notch from 6.21 percent in April, and 7.2 percent in May 2012. The percentage of properties in foreclosure also fell, coming in at 3.05 percent in May, compared with 3.17 percent in April and 4.12 percent a year ago.

Wall Street seemed to take all this good news to heart on Tuesday, forgetting for now about QE3 tapering, with the Dow Jones Industrial Average up 100.75 points, or 0.69 percent. The S&P 500 gained 0.95 percent and the Nasdaq advanced 0.82 percent.