March data out today: 10 City Composite down 18.65%, year over year & 20 City Composite down 18.70%, year over year.
These numbers were a bit worse than consensus, but the equity market has chosen to rally on the consumer confidence number.
Home prices are now back to levels last seen during the late Spring / early Summer of 2003. What does this mean? It effectively wipes out any lingering hope for mortgage equity withdrawal (MEW) continuing as a source of funds for consumer spending.
In fact, how many people still have ANY equity in their homes? Price drops are on the magnitude of down payments. Principal portions of monthly mortgage payments are quite small on relatively new loans. It is possible that, on average, 60% of the country is upside-down.
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