06:24
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NEW YORK (Reuters)-the drastic plunge in home prices continued to level out in April, hinting at stabilizing the property market, but the job market worries about consumer confidence to a minimum of seven months in June.
Although housing prices were helped by early spring, season sales, data showed on Tuesday, economists warn that prices will probably continue to crawl along at low levels because of the unusually high number of houses for sale and foreclosures going on.
"The degree of bleeding appears to be slowing," said Anthony Chan, Chief Economist at JPMorgan Private Wealth Management in New York.
"The patient is still bleeding and bleeding until we get all distressed and shadow housing inventory market to smaller levels".
While a fraction of the gross domestic product, U.S. housing prices also limit the weak consumer spending, and most economists expect the economy will be difficult to maintain a sustainable recovery without an improvement in home prices.
Indeed, consumers are more pessimistic about the Economic Outlook in June because of concerns about market opportunities and income.
The weaker rate of economic growth seen in the first quarter continued in the second quarter, although economists expect growth to pick up again in the second half of 2011 as temporary factors, such as high energy prices and supply chain disruptions from facility of Japan's earthquake of March.
Meteorologists see second quarter growth to about 2 percent, after the economy grew at a 1.9% pace in the first three months of the year.
The composite index S & P/Case-Shiller price of single-family homes in 20 metropolitan areas dipped 0.1 percent month on month on a seasonally adjusted basis. A Reuters poll of economists had expected a decline of 0.2 percent.
The decline was the smallest since last July. Average house prices fell from a year ago and were still at levels seen in the summer of 2003.
Not seasonally adjusted basis, however, the index increased 0.7 percent, its first advance in eight months, the report said.
"Seasonally adjusted numbers show that much of the improvement reflects the beginning of spring-summer home buying season", David Blitzer, Chairman of the index Committee at Standard Poor's &, said in a statement.
"It's much too early to say if this is a turning point, or simply due to some warmer weather.
U.S. home prices were supported in last spring by a tax credit, but the housing market has struggled since the credit expired. A monthly increase of prices in nine of the 20-City index suggests more serious pressure following the expiry has waned, Barclays Capital Research said in a statement.
ACID DRINKERS
The report helped give U.S. stocks a Boost, as did optimism to the Greek Parliament would adopt an unpopular austerity plan needed to avert default before the euro zone.
The Conference Board, a group of industry in the private sector, said that its index of consumer attitudes to 58.5 fell in June from a revised 61.7 in May and short of expectations for 60.5.
Acid view came after the economy added only 54,000 jobs last month while data earlier in the week showed consumer spending was flat in may from April.
The report of the Conference Board eco preliminary Thomson Reuters/University of Michigan survey earlier in the month. The Friday final reading is expected.
Economists said wrangling in Washington as lawmakers try to come up with a budget agreement to extend the debt ceiling likely also hurt sentiment.
"Add unrest abroad, a debt ceiling Commission still in traffic jams and a Federal Reserve that seems to have emptied their bag of tricks and his wonder consumers lost confidence in recovery" Lindsey Piegza, Economist at FTN financial, wrote in a note.
(Additional reporting by Alexandra Alper; Editing by Padraic Cassidy)
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