Home prices fell at a 7.3% annualized rate during the third quarter, according to Freddie Mac's conventional mortgage home price index. That was the largest quarterly decline in the index's 39-year history. Frank Nothaft, Freddie Mac's chief economist, said disruptions in the credit markets during the third quarter likely weakened demand for housing and contributed to the continuing price declines. "With the unemployment rate having risen to 6.5% in October, there will likely be further weakening in housing demand, which could push the market bottom in home sales and housing starts out at least until middle to late next year and result in further declines in house prices," Mr. Nothaft said.
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