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| Housing Experts Reassure U.S. Senate Panel |
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(September 14, 2006) --
The U.S. housing market is drifting down, but it is unlikely to crash, economists and business leaders told the Senate Banking Committee on Wednesday.
David Seiders, chief economist for the National Association of Home Builders, predicts the housing market would bottom out "around the middle of next year."
In prepared testimony, he told the committee home sales and housing production should transition to a gradual recovery that will raise housing market activity back to a sustainable level by the latter part of 2008.
"True housing busts are a relatively rare event," Richard Brown, chief economist at the Federal Deposit Insurance Corp., told the committee.
Prior to 2000, Brown says the FDIC observed 54 housing booms and only 21 housing busts. Of the busts, only nine followed a boom in the preceding five years.
Brown says that after a boom, housing prices are more likely to stagnate rather than drop sharply. Those housing doldrums can be "fairly painful" for home owners, builders, and real estate professionals, Brown says, but they fall short of causing distress for the overall economy.
Source: Reuters News , Patrick Rucker (09/13/06)
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