Mayors see major hit to economy

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The home building industry will suffer disproportionately, with new home construction sinking to its lowest level since 1993, the organization predicts.

And, with home equity levels in steep decline, growth in consumer spending will be curtailed - the mayors expect it to increase by just 2 percent.

Municipalities will start to feel the pinch with a decline in the property tax growth rate. Some places could even experience an outright decline in collections. The housing decline will also affect state coffers, as transfer taxes plummet along with home sales volumes.

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