Home prices fall again
NEW YORK (Reuters) US consumers turned more pessimistic this month, while home prices fell back below crisis-era lows in March, pointing to an economy that continues to struggle.There were also more signs of softness in manufacturing, as a barometer of business activity in the US Midwest fell to its lowest reading since November 2009, data showed yesterday.Other regional reports have pointed to weaker growth in manufacturing this month amid supply chain disruptions from the March earthquake in Japan. A gauge of the US national sector from the Institute for Supply Management’s manufacturing index is due today.After the economy grew at a slower rate than originally anticipated in the first quarter, indications are that the sluggish tone in growth persisted early in the second quarter.“The question is, ‘Is the softer data we’re seeing transitory, or is it likely to persist throughout the remainder of 2011?’ Right now, that’s an open question that investors are trying to figure out,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.US single-family home prices dropped in March to fall below the low hit in April 2009 during the financial crisis, a closely watched survey showed.The S&P/Case-Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists’ expectations.The 20-city composite index was at 138.16, falling below the 2009 low of 139.26.The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.Home prices had been supported last spring by a tax credit, and the housing market has struggled since the credit expired. Prices in the 20 cities fell 3.6 percent year over year, topping expectations for a decline of 3.3 percent.“The declines sustained in the last 12 months have almost erased the gains of the previous 12 months,” said Cary Leahey, economist and managing director at Decision Economics in New York. “The housing market is treading backward but not drowning.”Separately, the Conference Board, an industry group, said its index of consumer attitudes fell to 60.8 in May from a revised 66.0 in April, well bellow economists’ forecasts for 66.5.Consumers took a more negative view of business and labor market conditions, while inflation expectations jumped up.The Institute for Supply Management-Chicago business barometer dropped to 56.6 in May from 67.6 in April, missing forecasts for 62.6.New orders sank to 53.5 from 66.3, while the employment component of the index fell to 60.8 from 63.7.