The continued decline in home prices is driving down consumer confidence as well.

The Conference Board’s consumer confidence index plunged to 50.4 this month, hurt by inflation, sinking home values and soaring gas prices. It was the lowest reading since February 1992 and half what it was a year ago.

The index dropped more steeply than expected from 58.1 in May. Economists surveyed by Thomson/IFR had expected the report, released Tuesday, to show a more modest decline to 56.5 for June.

Inflation, political flux and job insecurity have created an ”uncertainty more acute, perhaps, than any time since 9/11,” said William Hummer, chief economist at Wayne Hummer Investments in Chicago.

U.S. home prices tumbled in April at the fastest rate since a widely followed index was begun in 2000. All 20 metro areas surveyed posted annual declines for the first time.

People are nervous, and value is disintegrating as their confidence wanes.

Reports are in that home prices have went down over 15% in a year in 20 major metropolitan areas.

Not surprisingly, Las Vegas, Miami and Phoenix saw the largest declines of home valuations. These cities are reporting a 25% loss in home values, which is pretty huge. Undoubtedly, they are the same areas that flourished with development and new builds from 2003 – 2005.

Analysts are saying that this trend could continue with foreclosures on the rise and no market to absorb the empty homes.

Many homeowners owe more on their homes than they’re worth after using it as a virtual ATM during the high flying days of first, second and third mortgages. Many owners are unable to leave or sell their homes without taking a loss.

David Blitzer, chairman of the index committee at Standard & Poor’s said:

“There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline.”

Falling real estate values affect us all, because when homes are left vacant neighborhoods decline. Lawns that were once tended are left to become weed gardens and pesky people like metal thieves steal the copper and anything of value from the interior of these homes, which could cause serious damage with leaked natural gas etc. Squatters are another risk to these areas.

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The pair is accused of misleading investors in two funds that first ignited the sub-prime mortgage crisis.

“The arrests are appropriate given the magnitude and the egregiousness of their alleged misconduct and is a gross violation of the public trust.” said attorney Steven Caruso, who is representing investors in arbitration claims against the funds.

Losses in the fraud cases will total $1 billion, according to Justice Department officials.

Continued write downs are putting downward pressure on the mortgage markets as banks have only begun to feel the pain. All this according to Christopher Low, chief economist for FTN Financial.