Jan. home prices in record fall; confidence edges up in March

WASHINGTON -- Home prices in January were down a record 19% from January 2008, according to the Standard & Poor's/Case-Shiller 20-city housing index released Tuesday, and a gauge of consumer confidence rose slightly in March but remained near record lows as the economy remained weak and job prospects grew increasingly uncertain.

The drop in the home price index was the largest decline since the index started in 2000. The 10-city index was off 19.4%, also a record.

The 20-city index fell 2.8% in January from December, S&P said, while the 10-city index declined 2.5% in January from December.

The drops on a month-over-month as well as year-over-year basis were bigger than expectations based on a Reuters survey of economists.

The Conference Board said its consumer confidence index rose to 26.0, from a revised 25.3 reading in February. Economists surveyed by Thomson Reuters were anticipating a reading of 28 in March. The rise, though slight, followed three consecutive monthly drops in consumer confidence.

"Apprehension about the outlook for the economy, the labor market and earnings continues to weigh heavily on consumers' attitudes," said Lynn Franco, director of the industry group's Consumer Research Center. "More job losses are on the horizon."

The survey's expectations index improved modestly, but perceptions about current conditions worsened from already extremely low levels.

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Respondents also showed a strong reluctance to spend money in an uncertain economic environment. Buying intentions for new cars fell to 3.9% from 4.7%, while the proportion of people saying they were going to purchase a home over the next six months fell to 2.0% from 2.3%.

In the housing index, all 20 cities in the report showed monthly and annual price declines.

Out of the 20 metro areas, 13 areas showed record rates of annual decline in January, and 14 areas reported declines in excess of 10% vs. January 2008.

Prices in the 20-city index are down 29% from their peak in summer 2006, while the 10-city index is off 30%. Prices are at levels not seen since late 2003.