S&P/Case-Shiller 20-City Home Price Index Up 4.6% Year Over Year
March 31, 2015
The S&P/Case-Shiller 20-City Home Price Index (HPI) Grew by 4.6% Year Over Year; Consumer Confidence Surged to 101.3 in March from February’s 98.8; People’s Bank of China Moves Toward Long-Term Liberalization of Interest and Exchange Rates on its Currency.
Economic Indicators & News
- The S&P/Case-Shiller 20-city home price index (HPI) grew by 4.6% year-over-year in January, its largest gain since September 2014, as increasingly limited supply and rising demand have placed continued upward pressure on home prices. The index, which performed in line with market expectations, declined marginally on the month, however, as atypically severe winter weather may have weakened sales activity in some cities. Fourteen markets reported the highest year-over-year increases over the last 12 months, including Chicago, Charlotte, Miami, and San Diego, while San Francisco, Seattle, and Washington D.C. experienced declines in growth rate of sales price for residential housing. [S&P]
- Consumer confidence surged in March to a reading of 101.3 from February’s revised 98.8, as the expectations component rose to a four-year high due to continued improvements to the labor market and gains in household income. The present situation component declined three points, however, as 16.7% of Americans still believe that business conditions are bad, though they are outnumbered by the 26.7% of people who believe the economy to be good. Moreover, inflation expectations rose 0.2% to 5.2% to reflect the current rebound in gasoline prices. March’s reading was well above the market expectation for a consumer confidence level of 95.5. [Conference Board]
- The People’s Bank of China announced that it would begin insuring deposits of up to $80,550 (500,000 yuan) in private Chinese banks, as the Beijing government moves toward long-term liberalization of interest and exchange rates on its currency. China’s leadership is hoping that the International Monetary Fund will designate its yuan as an official reserve currency later this year, a position currently held only by the U.S. dollar, the euro, and the Japanese yen. China’s central bank announced that 99% of the country’s $19.654 trillion in mainland bank deposits would be covered by the insurance, which will start May 1st and will be backed by a fund run by the central bank. It is still unclear how private banks will pay for the insurance, though central bank officials have signaled that the banks will be required to pay a fee according to the size of their deposit bases and risk profiles. [WSJ]