H4CBlog

Home prices across the country continued to fall in January at record rates while one measure of consumer confidence reached a five-year low.

The value of single-family homes plummeted 10.7 percent in January compared with a year earlier, as measured by the Case-Shiller index, a closely watched survey of 20 major metropolitan regions.

It was the steepest year-over-year decline since the index began eight years ago, and economists said the slump was probably worse than at the height of the last housing recession in the early 1990s.

The housing price decline may help to lure buyers back into the beleaguered market, where sellers are struggling under a wave of foreclosures and a tight credit market that has made it more difficult for many Americans to take out mortgages. Inventories have ballooned as purchases have dried up, as buyers hold out for prices to fall even further.

The decline in housing prices has been compounded by a general sense of gloom about the economy. Confidence among consumers unexpectedly fell this month to 64.5 from 76.4 in February, as measured by an index created by the Conference Board, a private research group. A value of 100 represents confidence in 1985.

A quarter of those surveyed believe businesses conditions will worsen in the next six months, and nearly a third said the economy would have fewer jobs. Fewer consumers plan to purchase big-ticket items like refrigerators and television sets, and more than half said that employment was currently “not so plentiful.”