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A record 26% of U.S. homeowners say the value of their homes has fallen during the past year, above the previous peak of 24% seen in 1992, a survey released Friday showed.
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"Overall, the data indicate no let-up in the slump in home prices," said Richard Curtin, director of the consumer surveys, in a statement.
While the Federal Reserve's half-percentage-point interest rate cut Tuesday would help homeowners whose mortgage rates are about to reset, shrinking home values and tougher credit requirements would overwhelm the positive impact from cash-out refinancing in the coming year, according to Curtin.
Homeowners in the western United States, where some of the most dramatic home appreciation had occurred, have been especially hard hit by the real estate downturn.
In the third quarter, 33% of homeowners surveyed in the West said their home value fell during the past year, up from 23% in the second quarter. Nearly a quarter expect home prices to fall further in the coming year, up from 17% in the second quarter, said Reuters/University of Michigan.
The housing slowdown has taken a toll on the consumer sector, which accounts for more than two-thirds of the U.S. economy. A pullback in personal spending has reined in overall economic growth since the first quarter of the year.
The latest housing data suggests that personal consumption would on average grow 2.0% during the next four quarters, well below the 3.7% seen in the first quarter, Curtin said.
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