A report Tuesday said prices of U.S. single-family homes plunged 18.5 percent in December from a year earlier, according to a Standard & Poor’s/Case-Shiller home price index. From the housing market peak in the second quarter of 2006, home prices have plummeted 26.7 percent.

Also on Tuesday it was reported that U.S. consumer confidence plunged to 25.0 from a downwardly revised 37.4 in January. The February reading was a new all time low for the index, which began in 1967.

My Comments: There seems to be no end to the same repetitive news. I continue to believe that irrespective how much U.S. Politicians ‘cheerlead’ with rhetoric about ‘getting the economy going, etc.’ nothing positive is going to happen unless the U.S. consumer has money in his/her pocket and the confidence to spend it. I think many Americans (and Canadians for that matter) long have believed their houses were an ‘investment’ that would grow in price (which I think many of them equate with ‘value’) over time. It is a fact that from after WWII house prices in both the U.S. and Canada have (broadly speaking) consistently increased in price. That has given homeowners a sense of security that in the U.S. has been seriously eroded in the past year in particular. That in turn, combined with the massive U.S. job losses experienced in the past year and that continue to be experienced and threatened, has resulted in an extraordinary reduction in consumer confidence. I will be surprised if this can be turned around any time soon. I think it could get worse before it gets better, and that concerns me greatly.

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