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Last Updated: Tuesday, 25 September 2007, 14:17 GMT 15:17 UK
Further price drop for US homes
US houses
There are major worries about the US mortgage market
The price of existing homes in the 10 largest US cities fell by 0.6% in July - the steepest drop in 16 years - a survey has found.

The data, from S&P/Case-Shiller home price index, put the annual price fall in those cities at 4.5%.

A broader survey of 20 cities found that prices fell in 15 of them, dropping an average of 0.4% from June to July, and down 3.9% on July 2006.

Large numbers of unsold existing and new homes have hit prices.

"The further deceleration in prices is still apparent across the majority of regions," said Robert Shiller, chief economist at MacroMarkets LLC.

Recession risk

The cities where prices are still rising are Atlanta, Charlotte, Dallas, Portland and Seattle.

However, these have reported that growth is slowing, the index compilers said, with Atlanta and Dallas moving closer to negative territory.

Analysts say that tight credit conditions - making it harder for people to get mortgages - are continuing to dent the market for house sales, which is already weak.

The housing slowdown and decline in credit availability have triggered worries that the economy could go into a recession - prompting the US Federal Reserve to slash interest rates earlier this month from 5.25% to 4.75%.

Last week, Mr Shiller told politicians that the loss of a boom mentality among consumers posed a "significant risk" of a recession within the next year.

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