None of the models showed flat or falling home prices, however.

So the direct impact of falling home prices on spending is likely to be more muted than expected.

Falling home prices have combined with declining interest rates to bring housing to its most affordable point since 1977, he said.

That dynamic could produce an unusual phenomenon: rising shelter costs and falling home prices.

Americans are struggling with unemployment, failing businesses, falling home prices and declining savings.

Moreover, falling home prices have given many renters an affordable alternative to paying higher rents.

But with those losses and those caused by falling home prices largely behind it, Home is abandoning its creed.

Falling Home is the fifth solo album from the singer/songwriter Jude Cole.

These include growing unemployment in military-supply and manufacturing industries, declining incomes, falling home prices, rising taxes and a credit crunch.

"We're now going to combine a high amount of debt with falling home values," said Mark Zandi, chief economist of Economy.com.

Matteson ought to be an integrationist's paradise, but whites are fleeing because of their concerns about crime and gangs, declining schools, and falling home prices.

"The boom is cooling now," said David Lereah, the chief economist for the association, who added that falling home sales have been "a bit worse than we had anticipated."

In select areas falling home prices along with a decline in the U.S. dollar have encouraged foreigners to buy homes for either occasional use and/or long term investments.

Falling home prices and rising incomes combined to raise the typical American family's ability to buy a home to its highest level in 13 years, a real estate trade group said today.

Already, falling home sales, slowly rising inventories of unsold goods and some easing in the purchase of cars and appliances herald the coming slowdown, some economists say.

Shocking as it is, the reaction to falling home prices mainly reflects the mind-set of a generation of homeowners who came to regard the abnormal as the natural economic order.

The central question now is whether the housing slump will spill over into other parts of the economy by causing falling home prices to lead households to reduce spending in other areas.

The following are excerpts of reader responses to David Leonhardt's Dec. 6 column on falling home prices: Re: the auction in Naples, Fl., that you described.

Falling home prices, especially in the Northeast, are partly to blame, but Arthur P. Soter, a banking analyst at Morgan Stanley, also points to relaxed lending criteria.

Retailers reported more early Christmas traffic in many locations, with consumers showing a somewhat greater willingness to spend despite continued concerns about rising unemployment - now at 10 percent - and falling home prices.

Record unemployment of 8.3 percent, falling home prices and Hong Kong's slow initial response to the SARS epidemic have sapped Mr. Tung's popularity.

This means working diligently to address the immediate problems of unemployment, falling home prices and limping credit markets, while laying out a long-term plan that ensures future economic growth that benefits all Americans.

"The survey does not reveal the source of their collective angst," Mr. Shepherdson wrote, "but we'd guess that a combination of falling home prices and worries about the wider economy are hurting."

Still, a significant number of skeptics say that this view does not fully take into account the risks that falling home prices and sales could crimp consumer spending and cause an economic slump next year.

In addition to job losses in construction, finance and related fields, falling home sales and prices threaten to dampen consumer spending, which has been energized by low-cost mortgages and home equity loans.