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Dropping home prices make homes more affordable, but tougher to sell

Falling home prices are continuing to cause issues for moving families.

Falling home prices are continuing to cause issues for moving families.

Home prices fell once again in July, causing more issues for families interested in relocation.

Data from the Federal Housing Finance Agency found that home prices fell by 0.5 percent in July following a 1.2 percent decrease in June. Taking a longer view, home prices have fallen 3.3 percent over the last year, and 13.8 percent from their peak levels in early 2007.

The dropping prices mean that while homes are becoming cheaper and more affordable for those who are interested in moving, it also means that they are having an increasingly difficult time selling their current home in order to do so - a situation that has trapped many families. Analysts blamed much of the drop in prices on the amount of foreclosures.

"We have a lot of homes for sale, and a lot of them are distressed properties," Thomas Lawler, founder and president of Virginia-based Lawler Housing and Economic Consulting, told Bloomberg. "That is putting downward pressure on home prices."

The decreases in home prices are continuing, despite banks' best efforts to avoid that effect. The most recent foreclosure report from RealtyTrac found that lenders were moving slowly to foreclose homes with delinquent loans in an effort to reduce the number of homes on the market.