National Home Prices to Fall For the First Time

When you think about places hardest hit by the current housing slowdown, the California, Nevada and Florida housing market may come to mind.

But now new figures indicate that a once-contained real estate bubble is spreading, and it’s affecting home prices across the country.

Jan Walston thought selling her Houston-area home would be a piece of cake. Her realtor thought it would only take about a week.

“It’s been several months now, and, um, we just haven’t gotten a good contract and its been an emotional roller coaster dealing with that,” Walston said.

The Texas mortgage holder now asking less than what she paid for it five years ago, just in hopes of getting the sale completed period.

She is just the latest victim of a hemorrhaging housing market. Fueled in part by bad credit mortgage woes in the world’s big financial houses, the national median price for U.S. homes is expected to drop in the next few years for the first time since statistics have been tracked.

Homes are the single greatest asset that most Americans own.

They’ve got a lot of savings locked up in their houses, and they don’t want to see the values decline. Experts forecast that after factoring in inflation, home prices will drop 10 percent nationwide by 2009.

And as home prices slip, consumer confidence is expected to follow - as will the number of home equity loans withdrawn and spent as cash.

“A lot of home owners are gonna pull back on their spending, and as you know the person who really keeps this economy chugging along is the consumer,” said Stephen Moore of the Wall Street Journal.

Walston has thought about just taking her house off the market. But she’s counting on selling this home to purchase a new one.

“We’ve signed another contract, we got the mortgage loan approved, we’ve got the interest rate locked. The only thing we’re waiting on is for this house to sell,” she said.

Follow our link to continue reading this ABC News investigation into falling home prices …