Housing Market could lead to recession

U.S. home prices have fallen further since 2006 than during the 1990-91 recession, and experts predict prices will drop up to 10% more next year.

So the question is no longer if a recession will occur, but when it will start.  Drops in home values will likely cut consumer spending sharply. If a home’s value plummets so does the owner’s sense of prosperity, which can restrict spending on everything.

Home prices fell less than 3 percent during the economic downturn of the early 1990s and have already dropped 3.2 percent over the past year, according the Shiller housing market index.