One of the major reasons consumer confidence continues to be low is the weakness in home prices. During the good times, positive home equity not only bolstered both consumer confidence it allowed the US consumer to spend much more than they earned.
Now the liquidity cycle is reversing itself. But even among these dark days, there is an inkling that the worst may be over.
Below is a chart showing the median single family US home price, priced in gold (one ounce). If you consider the US dollar to a dead currency walking and gold to be real money, then this chart shows that US home prices are close to reaching multi-decade lows and support.
The current price of a US home in gold is 106 ounces or approximately $162,000. That’s an 80% decline from the 2001 peak of 601 ounces.
Source: Chart of the Day