Conference Board: Housing Crunch Nearly Over

Despite continuing turmoil in the housing and financial markets, a U.S. recession is not imminent, partly because the housing downturn is "nearly over," according to The Conference Board. Housing will likely reduce growth by about 0.4% this year, the board said, but housing affordability is improving and recent interest rate cuts and home price declines should improve it further. Meanwhile, demographic trends favor housing, and the rise in households is outpacing the rise in permits. "All of this adds up to good structural demand for housing if the credit markets and lending institutions can ease the credit flow," the Conference Board said. Despite the weakened U.S. economy, consumer spending is rising at a rate of 2.0%-2.5% a year, and with the exception of the auto industry, the economy is showing gains nearly across the board, the Conference Board said. "While there is continuing uncertainty about the economic outlook, economic shocks from the contracting financial sector are not enough to tip the U.S. economy into recession," said Gail D. Fosler, president and chief economist of the Conference Board. The board can be found online at http://www.conference-board.org.