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The streets are empty. Trash rustles down the road past rusted barbecues, abandoned furniture, sagging homes and gardens turned to weed. This is Shaker Heights, a suburb of Cleveland and a town ravaged by the subprime mortgage crisis roiling the United States. Faded "for sale" signs sit in front of deserted houses. The residents are gone, either in search of new jobs after the factories shut down, or in shame after being evicted for missing their mortgage payments. A red, white and blue American flag flies over windows and doors which have been boarded up to keep the drug dealers...

NEW YORK (CNNMoney.com) -- Sales of existing homes fell to a record low in October, according to the latest reading on the battered housing market by an industry trade group released Wednesday, as even the largest drop in home prices ever wasn't enough to revive moribund sales. The National Association of Realtors reported that sales of homes by homeowners fell to an annual pace of 4.97 million in October, down from the revised 5.03 reading in September, which was the previous record low since the trade group started tracking sales on that basis in 1999. Economists surveyed by Briefing.com had...

Applications for U.S. home mortgages fell last week as rates on some adjustable loans soared to their highest levels in more than two months, according to data from an industry group Wednesday. RELATED LINKS Comments Lift Sentiment Stocks Open Higher Durable Goods Orders Fall for Third Straight Month Mortgage Applications Fall as Rates Soar The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 4.3 percent to 652.5 in the week ended Nov. 23. Rates on one-year adjustable-rate mortgages that include many jumbo loans climbed 26 basis points to 6.24 percent, the highest since the height...

NEW YORK - U.S. home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor began its nationwide housing index in 1987, the research group said Tuesday. ADVERTISEMENT S&P also reported that prices fell 1.7 percent from the previous quarter, the largest consecutive quarterly decline in the index's history. The S&P/Case-Schiller quarterly index tracks prices of existing single-family homes across the nation compared with a year earlier. A separate index that covers 20 U.S. metropolitan areas dropped 4.9 percent in September from a year earlier. A 10-area index decreased 5.5 percent...

<p>NEW YORK (CNNMoney.com) -- The mortgage meltdown will take a heavy toll on home prices in 2008 with declines expected to average 7 percent across the nation and lost property value of $1.2 trillion, according to the United States Conference of Mayors.</p>

NEW YORK (MarketWatch) -- Goldman Sachs economists on Tuesday said they now expect the U.S. Federal Open Market Committee to cut interest rates to 3% by mid-2008, down from its earlier forecast of 4%. "The main reason is that the worsening housing downturn has pushed the risk of a U.S. recession in 2008 to 40%-45%, from around 30% previously," Goldman said.

NEW YORK (CNNMoney.com) -- Housing price drops, driven by soaring foreclosure rates, accelerated during the three months ended September 30, according to the latest data from the National Association of Realtors (NAR). The median single-family house price in the United States fell to $220,800, which was down 2 percent from a year ago. Condo prices showed some resiliency: At $226,900, they rose 2 percent compared with 12 months ago. "The biggest decline in sales appears to be concentrated in areas that had significant levels of speculative investment, including Nevada, Florida and Arizona," Lawrence Yun, NAR's chief economist, said in a...

U.S. Treasury Secretary Henry Paulson said the number of potential U.S. home-loan defaults "will be significantly bigger" in 2008 than in 2007, the Wall Street Journal's online edition reported. AP Treasury Secretary, Henry Paulson -------------------------------------------------------------------------------- "The nature of the problem will be significantly bigger next year because 2006 (mortgages) had lower underwriting standards, no amortization, and no down payments," Paulson said in an interview with the Wall Street Journal on Tuesday, according to an excerpt on the newspaper's Web site. "We'll watch carefully mortgages that will be reset," Paulson was quoted as saying. The newspaper said Paulson was pressing the...

Fortune) -- Freddie Mac and Fannie Mae can only make it through a prolonged credit crisis if they raise billions of dollars of new capital. That, in a nutshell, is what the plunging stock prices of both mortgage buyers are saying Tuesday. Freddie accounted for a sharply higher batch of bad loans in its third quarter earnings, a little more than a week after Fannie did the same thing. But Freddie said that it would move quickly to raise more capital through a large issue of preferred shares. It added that it was seriously considering cutting its dividend - another...

NEW YORK (CNNMoney.com) -- Home builders' confidence stayed at record low levels in a November reading released Monday, as a slight uptick in buyer traffic was balanced out by a slightly more pessimistic view six months down the road. The overall National Association of Home Builders/Wells Fargo index was 19, which was the same as the upwardly revised October reading. The index measuring how builders view buyer traffic edged up to a reading of 17 from 15 in October. But the subindex measuring builders' view of the market six months from now slipped to a record low 25 from 26...

In March 1929, the Harding-Coolidge era came to an end. The eight years had witnessed the greatest peacetime prosperity of any nation in history: America in the Roaring Twenties. Early that March, Calvin Coolidge handed the presidency over to Herbert Hoover, who had just pulled off a third straight Republican landslide. "I do not choose to run," said Coolidge, who could easily have won a second full term. Silent Cal went home. Hoover, whom he privately derided as "Wonder Boy," presided over the Crash of '29 and the first three years of the Great Depression. History holds Harding, Coolidge and...

NEW YORK (CNNMoney.com) -- The Federal Reserve said that the decision to cut a key interest rate last month was a "close call," according to minutes from that meeting released Tuesday. But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December. The Fed indicated in an addendum to its minutes that it now expects the economy to grow at about a 1.8 percent to 2.5 percent rate next year, down from a forecast in June of 2.5...

Home prices fell last month in all six major Southern California counties for the first time in 12 years, prompting some economists to wonder whether the housing decline will push areas of the state into a recession. But San Diego County, one of the first markets to see a housing downturn, [might] be among the first to recover, one prominent economist said. DataQuick Information Systems reported yesterday that sales from Ventura to San Diego were at their lowest for any October since the La Jolla-based firm began keeping records in 1988. In the greatest drop-off, year-to-year sales were down 54.8...

NEW YORK (CNNMoney.com) -- The guessing game ended this week - consumer spending is slowing down as J.C. Penney became the latest retailer to confirm the trend. "We're in a very difficult selling environment," J.C. Penney CEO Myron Ullman told analysts Thursday in a conference call to discuss the company's third-quarter results. The call was monitored via Webcast in New York. "We came out of September expecting a strong start for early fall. That didn't happen. This is the first time that we're seeing a real change in consumer sentiment," Ullman said. Penney isn't the only one to be disappointed....

WASHINGTON (AP) -- Sales of existing homes in the U.S. are forecast to decline to a five-year low in 2007, a trade group for real estate agents said Tuesday - and the outlook for 2008 is worsening. The ninth-straight downwardly revised monthly forecast from the National Association of Realtors calls for U.S. existing home sales to fall 12.7 percent this year to 5.66 million, down from 6.48 million last year. Last month, the association predicted a 10.8 percent drop from a year ago. This year's sales would be the lowest since 2002, when sales hit 5.63 million. The realtors group...

Bank of America said on Friday that market dislocations, including those related to collateralized debt obligations, will adversly impact results duing the fourth quarter, according to a filing. The bank expects it to take more time for markets to return to a more normal environment with tighter credit spreads and greater liquidity, according to the filing. Also Friday, JPMorgan Chase said shaky credit markets could trigger more write-downs in the fourth quarter as the bank is exposed to about $50 billion worth of leveraged loans, risky subprime mortgages and collateralized debt obligations. JPMorgan did not give any specific potential write-down...

WASHINGTON - Fannie Mae's third-quarter loss more than doubled to $1.4 billion, reducing year-to-date profits by more than half, as credit losses and mounting mortgage delinquencies sour its outlook into 2008, the company said Friday. ADVERTISEMENT Shares of Fannie Mae, the largest U.S. buyer and backer of home loans, sank more than 9 percent in morning trading. Fannie Mae posted a loss equivalent to $1.56 a share, in the tumultuous July-September quarter, compared with a loss of $629 million, or 79 cents per share, a year earlier. Fannie Mae said it expects the housing downturn to continue into 2008, shrinking...

Wachovia said Friday it suffered a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial said more customers are having trouble paying their bills as the U.S. credit crisis deepened. Wachovia, the fourth-largest U.S. bank said the value of so-called asset-backed collateralized debt obligations it holds fell to $676 million as of Oct. 31 from $1.8 billion on Sept. 30. The $1.1 billion pretax loss is in addition to $347 million in the third quarter, Wachovia said. Wachovia also said it expects to boost loan losses by $500 million to $600 million this quarter, largely in...

Falling real estate prices, massive bank write-downs and a quickening drumbeat of slashed credit ratings adds up to one thing: The credit crunch has only just begun. While no surprise, given that economies are coming out of a worldwide debt binge, the fact that loans are harder to get for even the best borrowers raises the risks of a recession. It also puts the U.S. Federal Reserve in a tough spot, caught between the imperative of keeping the blood flowing in credit markets, and genuine concerns about inflation from more expensive food and energy.

WASHINGTON (AP) -- Consumers, battered by a steep downturn in housing and a severe credit crunch, slowed spending growth in September to the weakest performance in three months. The Commerce Department reported Thursday that consumer spending rose by 0.3 percent in September, slightly lower than the 0.4 percent increase that analysts had been expecting. Incomes grew by 0.4 percent, matching the August gain, and in line with analysts' forecasts. Video More video The latest in business news with the CNN.com business bulletin. Play video Economists are worried that consumers, the main support for the economy, may cut back on their...