No wonder sales of home goods are weak

Home goods is a key contributor to sales and profits at Target, but the category has been under pressure for some time, and recent data on home prices indicates why. Prices fell 19% during the first quarter, as measured by the Standard & Poor's/Case-Shiller National Home Price index. That marked the fastest rate of decline in the index’s 21-year history, and considerable uncertainty remains whether values are headed lower, as excess inventory is worked off and interest rates remain at attractive levels. Home prices have fallen 32.2% since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002. Declining home prices are damaging to the consumer psyche, since for many people their home represents their single largest investment.