Will Katrina Prolong Housing Boom?

The economic disruption caused by Hurricane Katrina could put a lid on mortgage rates and prolong the life of the housing boom, according to the chief economist for National City Corp."It is likely to extend the longevity of what otherwise seemed like a five-year housing boom that was nearing its end," chief economist Richard DeKaser told MortgageWire. He said he expects mortgage rates to stay below 6% until December if the Federal Reserve does not raise the federal funds rate at its Sept. 20 meeting. "We are likely to see some delay in the Fed's tightening efforts," he said. National City, based in Cleveland, is a major mortgage lender. Meanwhile, Business Roundtable chairman Hank McKinnell told reporters that the economic impact of Katrina could be more severe than that of other disasters because of its effect on oil prices. New Orleans is a major refining and distribution center for oil, gasoline, and natural gas. "The difference with Katrina, of course, is the impact on energy supplies," Mr. McKinnell said.