Consumer Confidence, New Home Sales Slump

Grim economic indicators continue to stack up
By Marie Morris,  Newser Staff
Posted Jun 26, 2007 12:13 PM CDT
Consumer Confidence, New Home Sales Slump
A concrete foundation for a new home under construction appears in North Andover, Mass. Wednesday, May 23, 2007. Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of...   (Associated Press)

(Newser) – Indicating that the topsy-turvy economy probably won't be righting itself anytime soon, consumer confidence dropped in May, as did new home sales, a signal that the reeling housing market has yet to hit bottom. The Fed will likely take up consumer worries at a 2-day meeting that starts tomorrow, Bloomberg reports, and probably won't change interest rates.

The larger-than-projected drop in consumer confidence and the 1.6% dip in new home sales reported today, combined with rising mortgage rates in a market already beset by subprime defaults, indicate trouble ahead for both housing and the economy overall. Says one economist: "There are some pretty significant negative risks for economic growth." (Read more housing market stories.)

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