Study Warns of Decline in Value of US Homes
Sunday, May 30th, 2010
WASHINGTON — The property value of U.S. homes will fall by $1.2 trillion, and “at least” 1.4 million homeowners will lose their properties to foreclosure in 2008, according to a study released Tuesday by the U.S. Conference of Mayors and the Council for the New American City.
The study, prepared by forecasting firm Global Insight Inc., predicts a widespread and deep economic impact from ongoing housing market problems, which many expect to stretch through next year.
Global Insight predicted that the economy would grow at a 1.9% rate in 2008, “a full percentage point lower than would have been the case without the mortgage crisis.” It also said U.S. gross domestic product growth would be $166 billion lower next year because of mortgage market problems, and that consumer spending would fall to 2% growth. The study also found that home price declines would average 7% in 2008, though it would be much higher — 16% — in California.