Confidence Edges Higher as Housing Momentum Slows — Evening Brief – 02.24.26
U.S. consumers entered February feeling marginally better about the economy, but housing data show a market still digesting higher rates and fading price momentum. The Conference Board’s Consumer Confidence Index rose to 91.2 in February, beating the 88.0 consensus and up from a revised 89.0 in January.
“Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhat,” said Dana M. Peterson, chief economist at The Conference Board. “Four of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8).”
Under the surface, the Present Situation Index continued to soften, slipping 1.8 points to 120.0, even as labor perceptions improved slightly: the share saying jobs are “plentiful” minus “hard to get” rose 0.6 percentage points to 7.4%. The Expectations Index climbed 4.8 points to 72.0, but inflation expectations over 12 months “remained elevated,” and consumers still anticipate higher-for-longer interest rates.
Housing data reinforced that cooling story. The S&P Cotality Case‑Shiller 20‑city home price index rose 0.5% month over month on a seasonally adjusted basis in December, matching November’s pace and topping the 0.3% consensus, but slipped 0.1% unadjusted. Year over year, the 20‑city index was up 1.4%, unchanged from November.
Because of recording delays in Wayne County, no valid December update was published for Detroit. “National home prices grew just 1.3% for the year — the weakest full-year gain since 2011, when prices fell 3.9%, and 5.3 percentage points below the 6.6% 10-year annual average,” said Nicholas Godec, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices.
“The first six months saw prices rise 2.6%, while the back half delivered nominal declines of 1.3% — and every one of the 20 tracked metro areas posted negative price returns over that same period,” he added.
FHFA’s separate purchase-only index rose 0.1% month over month in December, below the 0.3% consensus. U.S. house prices were up 1.8% year over year, down from a revised 2.1%, with fourth-quarter prices rising 0.8% from the prior quarter. Six of nine census divisions posted positive annual gains; the East North Central division led with a 5.0% increase, while the Mountain division recorded a 0.2% decline.