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Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

Big Drop in U.S. Home Prices: A Record Decline Nationwide, Though California Sees Rise [San Francisco Chronicle]

Summary: The National Association of Realtors has reported that national housing prices fell a record 2.2% to $220,000 in September, the sixth consecutive month that prices have declined. Sales last month of existing homes were also 14.2% slower than they were a year ago. In California, though, the state's strong, tech-powered job market coupled with tight housing supply lifted the median price of an existing single-family home by 1.8% to $553,050 last month from $543,510 in September 2005. Despite this positive, analysts expect California to begin to suffer as well because the pace of sales is slowing as buyers await a bottom. In addition, the run-up in prices has shrunk the pool of buyers who can afford the homes. In the Bay Area, existing home sales were down 24% in September from a year ago, while existing home prices rose 2.2% to $725,870. While some analysts maintain the market is merely correcting after a period of explosive growth, many believe the sector will continue to contract throughout 2007.
Related links: Eye On Existing and New Home SalesReflexive Changes in Real EstateDon't Let the Housing Spinmeisters Mislead YouHousing Bubble and Real Estate Market TrackerHousing: What Does "Return to Mean" Really Mean?Time to Start Looking Beyond the Housing SlumpHome Prices Keep Sliding; Buyers Sit Tight [Wall Street Journal] • Prices of Previously Owned Homes Fall [New York Times] •
Potentially impacted stocks and ETFs: Brookfield Homes Corp. (BHS), D.R. Horton Inc. (NYSE:DHI), Lennar Corp. (NYSE:LEN), Pulte Homes Inc. (NYSE:PHM), Toll Brothers Inc. (NYSE:TOL), Hovnanian Enterprises Inc. (NYSE:HOV) • iShares Dow Jones US Home Construction (NYSEARCA:ITB), SPDR Homebuilders (NYSEARCA:XHB)

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