With all of the main stream media economic recovery is here cheerleading rah rah, one would have expected consumer confidence to increase. But, guess what, it didn't.
The Conference Board Consumer Confidence Index™, which had retreated in June, declined further in July. The Index now stands at 46.6 (1985=100), down from 49.3 in June. The Present Situation Index decreased to 23.4 from 25.0 last month. The Expectations Index declined to 62.0 from 65.5 in June.
The median price of a new home dropped 12 percent from June of last year to June of this year. New homes that are being sold are not being bought by you and me; they are being bought by investors because prices are rock-bottom and interest rates are still low (5.55 percent).
Now, every housing market has and needs investors or, as they're pejoratively called, "speculators." But they alone will not make a housing market healthy. To make it healthy, it needs qualified buyers who are confident enough in their continued employment status and the overall quality of the economy to make the biggest investment of their lives.
Update: Calculated Risk has a very interesting post showing when seasonal adjustments are made housing prices declined.
Case-Shiller reported that prices fell at a 2.5% annual rate in May (SA).
and also predicts a steep price decline in the fall.