Industry News

NAHB: Economy may be headed for ‘red zone’

Forecast anticipates 31% drop in single-family housing starts this year

The chief economist for the National Association of Home Builders, in his latest annual forecast, said he expects total housing starts to fall 25 percent this year, with single-family starts plummeting 31 percent. "We still expect starts to begin edging up in the final quarter of this year, but we've also trimmed the outlook for 2009," Seiders stated in a forecast report released this week. Seiders acknowledged that there is "a nearly even chance" that the economy will slip "into the red zone during the first half of the year." He anticipates "further deterioration of labor market conditions in February, and the unemployment rate almost certainly will be moving up in coming months." He also expects gross domestic product growth of less than 1 percent in the first half of 2008, "and a mild recession certainly is possible during that period," the report states. "Our baseline housing forecast shows substantial reductions in home sales, housing starts and residential fixed inve...