NEW YORK, Aug. 25 The median price of U.S. homes is expected to drop in 2007 for the first time since 1950, when federal housing agencies began tracking the number.
Economists said the decline will probably come in at 1 percent to 2 percent, The New York Times reported Saturday. That would be a modest decline, the economists said, but the trend could continue into 2008 and 2009.
Price declines are not only occurring in the Northeast and California, but are also showing up in cities such as Chicago, Minneapolis and Houston, the newspaper said.
The housing decline has disrupted financial markets, and forecasters say it will lead to a slowdown in economic growth over the next year or two.
Consumer spending has been significantly driven by homeowners' ability to borrow money against equity in their homes.
Unless the housing decline is much worse than economists expect, the newspaper said the price declines do not threaten to wipe out increases of the past decade.
Copyright 2007 by UPI
