According to Wachovia Economics Group report for February 2007, the housing market may see bottom sometime after the middle of the year. The report also projects the Feds to hold interest rates at or near their current level for the entire year. These sound like good signs for the real estate industry nationwide!
“We have raised our estimate for GDP growth this year to 2.6 percent, based largely on the recent strength in consumer spending and what appears to be the beginning of a turnaround in the nation’s trade deficit. Residential construction and motor vehicle assemblies will continue to be a drag on overall growth and business fixed investment will likely get off to a slow start this year.
The major downside risk to the economy continues to be the housing sector. We expect the bulk of the decline in residential construction to be behind us by the middle of this year. That may prove to be too optimistic, however. In addition, inventories could pull-back more than we
currently expect, giving us lower GDP figures in the early part of the year. With economic growth out of the danger zone, the Federal Reserve will likely hold interest rates steady this year. Monetary policy is currently slightly restrictive and will become even more so if GDP growth rises just 2.6 percent
this year.”
Special thanks to David Bell of Wachovia for providing this report. Contact David for all of your commercial financing and business banking needs at 770-618-1625.
Download the full .pdf file for Wachovia Economic Group Monthly Outlook.
