The Consumer

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U.S. home prices have increased every year since 1950, says Freddie Mac. But prices fell in seven of the past 25 years after factoring in inflation. Local and statewide drops are common, typically tied to recession or regional shocks.

ATM @ Home

Surging home equity gives owners a source of cash. Economists say at least half of this money is used to pay for goods and services. A housing slowdown would shrink home-equity cash.

Source: Study by Federal Reserve's Alan Greenspan, Sept. 2005

Home prices vs. home loans

High prices mean big mortgages; the average homeowner this year is spending 10.6% of disposable income on mortgage, home insurance and property taxes, the highest level on record.

Source: American Demographics analysis of data from Fannie Mae, Federal Reserve Board, National Association of Realtors and Office of Federal Housing Enterprise Oversight

Spending vs. saving

Starting in June 2005, consumer spending exceeded after-tax income from wages, government support and investments, giving the nation a negative personal saving rate for the first time since 1933.

Source: Bureau of Economic Analysis (savings); Federal Reserve Board (debt)

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