Freddie Mac economist says worst of US housing slump over
Nov 15, 2006
WASHINGTON (MarketWatch) -- The worst of the nation's housing slump is over, and the market should show signs of a pickup around mid-2007, a senior economist at Freddie Mac (FRE) said Wednesday.
"I think the worst is behind us in terms of the downturn in the housing market," said Frank Nothaft, Freddie Mac vice president and chief economist, at a luncheon in Washington, D.C.
While Nothaft felt the market may not have reached its "trough" yet, he said it was unlikely that housing starts would plummet as dramatically as they did from the third quarter of 2005 to the third quarter of 2006, when they fell by 18%.
"Housing starts will trend a bit lower, and we have them bottoming out at some point in the first half of 2007," Nothaft said. "I think by the midpoint of 2007 we're going to consistently see some positive signs," he added.
Those predictions for the housing market coincide with Nothaft's expectations for below-trend overall economic growth in the first half of 2007, followed by an uptick in the second half of next year, with overall gross domestic product growth coming in at 3.2% for 2007.
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