The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950. Economists say the decline, which could be foreshadowed in a widely followed government price index to be released this week, will probably be modest – from 1 percent to 2 percent – but could continue in 2008 and 2009. Rather than being limited to the once-booming Northeast and California, price declines are also occurring in cities like Chicago, Minneapolis and Houston, where the increases of the last decade were modest by comparison. The reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s. While the housing slump has already rattled financial markets, it has so far had only a modest effect on consumer spending and economic growth. But forecasters now believe that its impact will lead to a slowdown over the next year or two. ‘For most people, this is not a disaster,’ said Nigel Gault, an economist with Global Insight, a research firm in Waltham, […]