More slow growth expected in economy

Economic growth will continue to slow through the rest of 2006 but should return to near normal growth during 2007 and 2008, according to the latest economic forecast released this week by the Mortgage Bankers Association. Total residential mortgage production in 2006 is expected to be $2.46 trillion, the fifth-highest level ever, but will drop another 14 percent in 2007 to $2.1 trillion and remain unchanged at that level in 2008. "Despite sluggish growth, largely due to declining residential investment and auto production in the second half of this year, we are optimistic about a rebound in 2007," said Doug Duncan, MBA chief economist and senior vice president for research and business development. "Long-term interest rates have remained low in the face of rising short-term rates, equity prices have risen nearly 20 percent, capital expenditures remain strong, the trade sector has turned from a big drag on growth to a modest stimulus, and energy prices have dropped sharply." In his ge...