Consumer Expectations Drop to 35-Year Low, Home Prices Down 10.7%

Only two business days after the Conference Board sent a dire warning on the economy with the release of its leading indicators index (“Economy Grinding to a Halt: Conference Board,” March 21), the research group is at it again, announcing Tuesday the lowest level in 35 years for its consumer expectations index.

The index, reported along side the closely watched consumer confidence index, covered consumer sentiment for March. The index fell to 47.9 in March – the second-lowest reading on record -- from 58.0 in February. The lowest reading of the expectations index occurred in December 1973 at 45.2.

The consumer confidence index in March, meanwhile, fell to 64.5 from 76.4 in February. That is the lowest reading of consumer confidence since the beginning of the Iraq War in 2003. Economists surveyed by MarketWatch had expected a March reading of 73.3.

In a separate report Tuesday, Standard & Poors said that home prices dropped an average of 10.7 percent in the past year in 20 major U.S. cities. The home value declines were lead by houses in Las Vegas and Miami – both down 19.3 percent. The only city in the study to record prices increases was Charlotte, N.C., which saw home prices increase 1.8 percent.

The report, called the Case-Shiller home price index, noted that all of the 20 cities recorded lower prices compared with the previous month rather than the previous year.

A separate report from the Office of Federal Housing Enterprise Oversight showed that housing prices declined 3 percent in the past year. The OFHEO report does not cover homes bought with non-conforming and subprime mortgage loans whereas the Case-Shiller index does.

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