Home prices in the U.S. dropped last quarter for the first time in almost 16 years, as 13 out of 20 cities reported declines in March.
The value of a house dropped 1.4 percent in the first three months of the year from the same period in 2006, according to a report today by S&P/Case-Shiller. Prices last fell during the third quarter of 1991.
Nonetheless:
The housing slump has yet to shake sentiment. An index of consumer confidence rose to 108 this month from a revised 106.3 in April, a five-month low, the New York-based Conference Board reported today. The private research group's index averaged 105.9 last year.
The decline in prices may not be large enough to concern the majority of home owners, economists said. The drop in prices in the 12 months ended March pales in comparison to the 157 percent gain over the previous 15 years.
Well, sentiment comes and sentiment goes, but just maybe the broader perspective on those Case-Shiller prices really does mean something:
I realize it has become somewhat fashionable to dismiss the fact that these housing-price declines arrive against the backdrop of extraordinarily high levels, presumably on the theory that price appreciation has been more than matched by consumers' insatiable quest to stretch themselves to the limit...
The retreat may deter owners from tapping into home equity for extra cash, economists said. Combined with record gasoline prices, lower home prices raise concern consumer spending, which accounts for more than two-thirds of the economy, will slow.
... or that widespread financial doom (of some sort) is right around the corner. I'll admit that the U.S. economy is not yet proofed from the bullets, but you gotta admit -- so far we're doing a pretty good job of dodging them.