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There is a one-in-three probability that the nation will sink into an economic recession, according to the latest report from David F. Seiders, chief economist for the National Association of Home Builders trade association. (Not bad odds for blackjack, but not great for Russian roulette or real estate speculation.)

Seiders said in his latest report that economic weakness "primarily reflects the deepening housing market correction," and turbulence in the financial markets. Continuing declines "have provoked yet another trim to NAHB's housing outlook for the balance of this year and 2008," Seiders noted, though the group still expects home sales to bottom-out in early 2008, with 2009 serving as "a solid recovery year."

The association expects more short-term rate cuts by the Fed this year, with quarter-point cuts in the federal funds rate at the Fed's Oct. 31 and Dec. 11 meetings.

New-home sales, as measured by the U.S. Commerce Department, are expected to hit a low annual pace of 765,000 units in 2008 before reaching a pace of 925,000 by the end of 2009, according to Seiders' report, with single-family housing starts hitting a low annual pace of 930,000 before recovering to a pace of 1.16 million by the end of 2009.

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