Plummeting house prices will take their toll on the US economy next year wiping half a percentage point off GDP growth, according to a top bond investor.

Quentin Fitzsimmons, head of government bonds at Threadneedle Investments, has slashed his forecast for US growth next year to 2% from 2.5%, after the S&P/Case & Schiller US National Home Price Index fell 3.2% in the last quarter compared to the same period last year.