There were two important economic news items today. Consumer confidence improved slightly in March, but February was still the lowest reading since records began in 1967. Confidence and the economy tend to feed off each other. When consumers feel more optimistic, the economy improves and in turn, lifts consumers’ sentiments. We’re currently watching the reverse.
The Case-Shiller Index showed the home prices in January were down 19% from last year. That’s the steepest drop on record. Year-over-year home prices fallen for more than two straight years. In my view, we’re still going to see more declines of 15% or more. However, once inventories tighten up, the housing market should stabilize.
