Consumer Confidential: Housing improves, Honda Fit recalled, prices go up
-- Some much-needed good news on the housing front: The number of U.S. households behind on mortgage payments fell during the fourth quarter to the lowest level in two years. However, the number of loans in foreclosure remained at its highest level since the mortgage crisis began, in part because banks throttled down a bit on the foreclosure process after document-handling problems surfaced in September. According to the Wall Street Journal, nearly 12.9% of home loans were 30 days or more past due or in foreclosure at the end of December, representing about 6 million households. That rate is down from 14% one year ago but still up 11% from two years ago.
-- The Honda Fit isn't (fit, that is). Honda is recalling about 693,000 subcompacts sold worldwide under three nameplates -- including about 97,000 Fits sold in the U.S. -- for bad springs in the engine's valvetrain. According to USA Today, the recall is to replace bad "lost motion springs," which are compressed by rocker arms in normal engine use. I have no idea what that means, but it sounds bad. Honda says the problem can result in abnormal engine noise and potentially cause engine damage or stalling. The carmaker is encouraging all owners of affected vehicles to take their Fits to a dealer as soon as they receive mail notification, which will begin next month.
-- If it seems like stuff cost more last month, well, it did. Consumers paid more in January for everything from food and gas to airline tickets and clothing. The Consumer Price Index rose 0.4% last month, matching December's increase, the Labor Department says. In the last year, the index has risen 1.6%. Excluding volatile food and energy costs, the core index rose 0.2%. According to the Associated Press, that's the largest increase in more than a year. Core prices increased 1% over the last 12 months. Food prices increased 0.5% in January, the most in more than two years. Gas prices rose 3.5%.
-- David Lazarus
Photo: Mortgage delinquencies are down as the housing market improves. Credit: Jae C. Hong / Associated Press