Three top economists agree: A soft landing is in store
for the nation's housing market, though the Federal Reserve could still cause some unexpected turbulence with its inflation-fighting maneuvers.
Participating in a July 5 media teleconference on the mid-year housing outlook, NAHB Chief Economist David Seiders shared the spotlight with a pair of other chief economists – David Berson of Fannie Mae and Frank Nothaft of Freddie Mac. Seiders noted that he has alerted the Fed to the downside risks for housing if interest rates are pushed up too far, but said the Fed's monetary policies for controlling inflation are already proving effective. Ironically, however, by helping to slow home buying demand, the Fed's policies have created upward pressure on market rents that is in turn driving up the "owners' equivalent rent component" of the core inflation measures that the central bank has been watching so closely. One piece of good news: for the time being, at least, Seiders said that interest rates for both fixed- and adjustable-rate home mortgages "look remarkably peaceful" and won't move up much further. The teleconference was very successful in attracting major media outlets – including The Washington Post, The Wall Street Journal, LA Times, New York Times, National Public Radio, CNN, Reuters and The Chicago Tribune. Read more about how Seiders, Berson and Nothaft view the economy and housing market in the July 17 edition of NBN Online. Also view slides of the presentations given during the press confererence and listen to a recording of it at www.nahb.org/teleconference. Contact: Paul Lopez, x8409.