Home prices jump by record amount in June
WASHINGTON – U.S. home prices jumped by a record amount in June as homebuyers competed for a limited supply of available houses, the latest evidence that the housing market remains red-hot.
The S&P CoreLogic Case-Shiller 20-city home price index soared 19.1% in June compared with a year earlier, the largest increase on records dating back to 2000.
The annual price gains in June were higher in all 20 cities than they were in May. Prices are now at record highs in 19 of the 20 cities, with the exception of Chicago.
“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, managing director of index investment strategy at S&P DJI.
There are signs that the high prices are cooling sales a bit.
Sales of existing homes rose 1.5% in July from a year earlier, a separate report showed last week.
That’s a much slower pace than the previous month. And the number of contracts signed to buy homes, a leading indicator of final sales, has fallen for two straight months.
Prices rose in June by the most in Phoenix, where they soared 29.3% compared with a year earlier, followed by San Diego, with a 27.1% increase, and Seattle, at 25%.
The COVID-19 pandemic has driven many Americans to seek homes in suburban areas that provide more space and are not as congested as apartments in big cities.
Consumer confidence suffers drop in August
WASHINGTON – U.S. consumer confidence fell in August to the lowest level since February amid rising concerns about the rapidly spreading delta variant of the coronavirus and worries about higher inflation.
The Conference Board reported Tuesday that its consumer confidence index dropped to a reading of 113.8 in August, down from a revised 125.1 in July.
It was the lowest level for the index since a reading of 95.2 in February.
The July index was revised down from an initially reported 129.1 which followed a reading of 128.9 in June, the best showing since before the pandemic struck in February 2020.
The Conference Board said that concerns about the resurgence in COVID cases as well as worries about rising gas and food prices had contributed to the drop.
With the August decline, the overall index is 19 points below its pre-pandemic level. The drop in August reflected a weakening in both the current conditions and expectations components of the index.
Railroad merger in jeopardy after ruling
OMAHA, Neb. – Canadian National’s $33.6 billion deal to acquire Kansas City Southern railroad is in jeopardy after federal regulators on Tuesday rejected a key part of the plan and opened the door for a competing $31 billion offer from Canadian Pacific Railway.
The Surface Transportation Board said Canadian National won’t be able to use a voting trust to acquire Kansas City Southern and hold the railroad while the board reviews the overall deal.
It wasn’t immediately clear whether Kansas City Southern will still want to move forward with the deal without a voting trust that would allow shareholders to get paid before the regulatory board embarks on its lengthy review of the deal.
Plus, Kansas City Southern is now free to accept CP’s offer, which already has regulatory approval to move forward.
All three railroads involved in the deal didn’t immediately react publicly to the ruling Tuesday.
From wire reports