KEY POINTS:
American house prices fell by record amounts in the third quarter of this year.
The average home dropped by 4.5 per cent in the third quarter of this year, compared with the same period 2006, according to Standard & Poor's. It is the sharpest drop in property values since the firm inaugurated its national Case-Shiller index in 1987.
One of the index's creators predicted a significant chance of a recession as the US economy is pummelled by falling housing prices, defaults and repossessions (especially but not confined to the sub-prime borrowers), depressed financial markets, soaring oil prices and a decline in the dollar that threatens to turn into a rout.
"Over 50 per cent," said MacroMarkets LLC chief economist Robert Shiller, giving his odds for a recession. After 13 years of rise the US property market is crumbling, though the Federal Reserve has recently cut interest rates twice to calm property and financial markets.
- Independent
