07/23/2009 05:12 am ET | Updated May 25, 2011

Home Prices: Why They're Less Important Than You Think

Much commentary in the financial press over the last several months has been concerned with the impact of falling house prices on consumer spending. While some see evidence of "green shoots" and hope for economic growth over the horizon, many still fear that lower home values will depress consumer spending. This "wealth effect," a drop in home values that causes consumers to cut back on purchases, is thought to dampen economic growth and hamper any recovery.

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