A "soft landing" and continued good health for the housing market
— that's the consensus forecast of economists speaking at NAHB's 69th Construction Forecast Conference, held at the National Housing Center and broadcast live over the Internet on May 5.
The event attracted a standing-room-only crowd and drew substantial media attention — including reporters from the likes of The Wall Street Journal, The Washington Post, Kiplinger's and Nightly Business Report, as well as syndicated real estate columnist Ken Harney, to name just a few. They heard from some of the nation's top economists that, while the Federal Reserve can be expected to gradually tighten monetary policy (resulting in higher interest rates), the last thing Chairman Greenspan wants to do is derail the healthy housing market. Instead, the Fed is simply "taking its foot off the gas" as housing coasts to a level speed with decent momentum. NAHB Chief Economist David Seiders predicts long-term fixed-rate mortgages will average 6.1% this year before gravitating up to a 6.6% average in 2006. Meanwhile, residential fixed investment should post a 1% growth rate this year before becoming a neutral or possibly slightly negative influence on GDP in 2006. A few very hot markets in places like California, Nevada and South Florida may be due for some cooling down, said the economists, but few can expect a major downturn. The May 9 edition of Nation's Building News Online will have complete coverage of NAHB's Construction Forecast Conference.