Oct. 2, 2006: Housing Downturn Not Expected to Drag Economy Into Recession
David Seiders, NAHB's chief economist, said that he is forecasting an 11.5 percent decline in housing starts this year, followed by another 11.7 percent drop in 2007. Housing should bottom out by the middle of next year, and will be approaching a demographically-based trend production level of about 2 million units in 2008 (including manufactured homes).
Following an unsustainable boom in housing starts, sales, and price appreciation in 2004 and 2005, "we need a period of below-trend performance to work off excess inventory and improve housing affordability," said Seiders. "Mortgage rates are dropping; builders and sellers are offering all sorts of incentives and upgrades, energy costs are retreating, and the national economy is moving ahead, making it a very good time to buy a home."