September 26, 2007
|US Home Prices: Worst Drop In 16 Years||Economy|
Housing news keeps getting worse. AP:
The decline in U.S. home prices accelerated nationwide in July, posting the steepest drop in 16 years, according to the S&P/Case-Shiller home price index released Tuesday.
Home prices have fallen by more every month since the beginning of the year.
An index of 10 U.S. cities fell 4.5 percent in July from a year ago. That was the biggest drop since July 1991. [...]
[Robert] Shiller, an economist at Yale University, told lawmakers in written comments last week that the loss of a boom mentality among consumers poses a "significant risk" of a recession within the next year. [Emphasis added]
The big wave of adjustable-rate mortgage resets hasn't even hit yet. The economy has been kept afloat in the Bush years by people taking cash out of their homes and spending it. That spending is coming to a screeching halt, so housing's problems are going to impact a whole lot more than just housing.