Forcasting Reports circulated regarding US Economy and Housing Market in 2008. 

Anticipating an increase in the unemployment rate and “further deterioration of labor market conditions in February,” Chief Economist for the National Association of Home Builders, David F. Seiders, anticipates the economy slipping “into the red zone during the first half of the year.”  In his forecast report circulated earlier this week, Seiders anticipates a growth of less than 1 percent in the gross domestic product market and he also expects total housing starts to fall 25% in 2008.   With the financial market mayhem continuing, the markets for long-term credit linger under substantial strain and the housing market remains erratic.  Single-family housing starts are forecasted to fall 31 percent in 2008 and “[t]he banking system will have to take up a good bit of the slack in the credit creation process,” according to Seiders.  Consequently, the banking system has constricted lending standards for customers and “afflicted all components of the conventional home mortgage market.” Meanwhile, the U.S. Census Bureau and Housing and Urban Development Department released the current statistics for new-home sales and the National Association of Realtors has reported on resale homes.  According to the reports, new homes are averaging 6.7 months on the market, as of January 2008, while resale homes are dropping 23.4 percent compared to January, 2007.  In addition, the number of total foreclosure filings increased in one year by 57 percent.  According to Seiders, such foreclosures “are sure to extend through 2008 and into 2009.” President Bush has acknowledged the economy is in “a slowdown” and Senator Larry Craig (R-Idaho) suggests that “the economy is down and the clock is ticking toward a possible recession.”  Consequently, the Federal Reserve may increase the monetary stimulus currently allotted “if conditions warrant.”  Seiders adds that while Bush’s Economic Stimulus Act of 2008 offers some optimism, “it remains to be seen how much additional home buying will be stimulated over the balance of the year.”