Generation X Will Be Affected If Home Prices Drop:

A recent survey conducted by a Boston based research analyst firm predicts that Generation X will face a lot of hardship if real estate prices drop. Even a modest drop of 10 percent could mean a large scale cut-back in spending by this group of home owners.

A 25 percent drop in prices could mean a lot of the homes owned by these younger generation could go for foreclosures. Most of these people in their 20's and 30's don't have cushion to fall back upon if the housing bubble bursts. Though many in this generation earn much more than the baby-boomer generation did at the same point in their lives the Gen-xers are much more over-leveraged and have put in a lot of their assets in order to buy homes.

The debate among the government and experts about whether the drop in real estate prices will have any effect on the consumer spending seems to be answered by this survey as far as the younger generation of home buyers is concerned.