The chief economist of the National Association of Home Builders forecasts that 2009 will mark the bottom of the current housing cycle. Speaking at the International Builders Show (I’ll bet that was a happy affair!), David Crowe said he expects starts to fall another 30% this year and sales to drop 14%. He expects the absolute bottom to come in the middle of the year with an upswing after that.

At the same show, the chief economist of mortgage insurer PMI Corp. said that he expects housing prices to continue to slide throughout 2009 and maybe into 2010. His studies show that of the 50 largest metropolitan areas, more than 50% could see falling home prices for the next two years.

All of which proves the point we continue to make that economists have absolutely no idea of what is going to happen. Like all of us they are at the mercy of the extent and effectiveness of coming government programs and policies.

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