The economists that were surveyed are however split in their opinions. Eleven of them stated they felt there was at least a 50% chance of recession. On the other hand, 13 stated they felt the chance was less than 30%.
Of the economists that believe that a recession is inevitable, they state that the current magnitude of housing declines rarely occurs except when there is a recession. Chief economist with Friedman, Billings, Ramsey & Company, Inc., Steve East, predicts a 60% chance of recession states "that's the message of the credit market turmoil." He continues by stating that the economy will not have as much "high octane" fuel to run on.
Just one out of eight economists surveyed feels that the credit crisis-with its related housing turmoil has mostly run its course. Approximately 60% believe that it is half over. The rest believe that it is still in its early stages.
Only a few analysts believe that the housing market has hit its lowest point. Home prices are expected to continue to drop, and construction activity is expected to further slow down through at least 2008.
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