Tuesday, May 31, 2011

US housing market in double dip as prices fall to fresh lows

US house prices have fallen to fresh lows, according to a widely-watched report that managed to stand out among a blitz of worrying data for the world's biggest economy.

Average home prices slumped 5.1pc in the first quarter of the year from the same period in 2010, the latest report from the S&P Case-Shiller index showed yesterday.

The index's reading of 125.41 for the quarter was the lowest since house prices began falling in the summer of 2006.

The report "is marked by the confirmation of a double-dip in home prices across much of the nation," said David Blitzer, chairman of the committee that puts together the report. "Home prices continue on their downward spiral with no relief in sight."

While the housing market has been a well-known Achilles heel for the recovery, yesterday also saw evidence that the country's manufacturing sector - a robust, albeit small, part of the economy - is slowing.

A reading from the Institute for Supply Management's index that measures the state of manufacturing around Chicago showed a decline to 56.6 last month (MAY) from 67.5 in April. (read more)