Housing Slump Could Last Til Year's End

The U.S. housing market will continue to slump for the remainder of 2007, with home sales falling further and price growth continuing to slow. This word from a leading industry economist, David Berson, vice-president and chief economist at Fannie Mae, said 2006 and 2007 combined will show the biggest drop in sales since the housing downturn of 1989-91.

An increase in mortgage rates over the past few months, particularly in the past month, will soon have an additional negative impact on housing demand, according to Berson.

He expects new and existing home sales to decline by 10.2 percent in 2007 to the lowest level since 2002. Single-family starts are expected to fall 21.7 percent.

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