Home Prices Show Record Drop

Consumer confidence off too; the credit market is to blame, again
By Wesley Oliver,  Newser Staff
Posted Aug 28, 2007 11:21 AM CDT
Barry's store on Thursday, Aug. 16, 2007 in New York. Consumer confidence weakened in August as volatile financial markets and housing problems took a toll, a private research group said Tuesday, Aug....   (Associated Press)
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(Newser) – The credit market is continuing to weigh on economic indicators, Bloomberg reports, as home prices and consumer confidence both notched records in their downward swoon. A report released today showed home values down an unprecedented 3.2% in the second quarter. Consumer confidence this month fell to its lowest levels in two years.

Economists blame sagging sales and choosier mortgage lenders for the decline in home prices. “The pullback in the U.S. residential real-estate market is showing no signs of slowing down,” one economist said. A realtor trade group predicts housing demand will plummet to a five-year low this year. And the drop in consumer confidence could negatively impact consumer spending, which composes two thirds of the US economy.