NEW YORK - June 24, 2008 - U.S.
house prices dropped 22.8 per cent over the last three months as American
consumer confidence signaled the worst level of consumption since 1974.
Wall Street economists described the statistics as "incredibly awful" and indicated that the likelihood of the U.S. Federal Reserve raising interest rates when it meets today and tomorrow was very remote.
The numbers will come as a severe blow to Washington which had hoped that this summer's $150 billion tax rebate program would lift the U.S. economy out of the gloom.
However, the housing recession - which shows no sign of abating - record gasoline prices and rising food costs have conspired to offset the impact of the fiscal stimulus package.
According to the S&P Case-Shiller house price index, considered as the most authoritative measure of U.S. property values, the price of the average American home fell 1.4 per cent in April from March, and by almost 23 per cent over a three month period.
The rate of the April fall however, had slowed, with the index recording 2 per cent monthly declines in the past. The index measures house prices in 20 metropolitan areas in the U.S. - last month, Miami and Phoenix were the worst performing cities both down 3 per cent.
At the same time, Washington published official figures measuring U.S. consumer confidence in June.
The data showed that Americans had the least confidence in their finances since records began in 1967. If borne out, Wall Street expects the lack of confidence to translate into a 3 per cent slide in overall consumption.