LONDON, England – More signs of stress in the U.S. economy. Consumer confidence continues to fall and is now at its lowest level since the beginning of the Iraq war in March of 2003. Consumers are feeling the pinch of higher gas and food prices, and less wealth because of falling house prices. Plunging house prices may actually be closer to the mark.The closely watched Case-Shiller numbers showed a near 13-percent year-on-year drop in their latest report. It gets even more depressing. If you take a three month snapshot, and annualize it, the rate of decline is a shocking 22 percent.
No one's bragging anymore about how much money they've made on their home. And it's likely to get worse before it gets better, which will complicate any hope of recovery in the economy.
Consumers might get a slight reprieve from tax rebate checks now being sent out, but many of those getting it will pay down debt or save it.
And given how quickly house prices are falling, the rebate is a drop in the economic ocean. It's estimated a trillion dollars of value has been wiped off homes in just two months ... nearly 10 times the size of the federal tax rebate.
I've been saying for a long time, you can't get a recovery in the economy until you get a recovery in housing, and that recovery is still a long way off.
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