The end of the housing boom, which is apparently now underway, is arguably the biggest risk to
the US economic outlook over the next couple of years
. In previous Focus pieces we have argued
that even a benign end to the boom, in which house prices simply level out at the national level
rather than fall, could generate a severe slowdown in consumption and residential investment. As a
consequence, we expect GDP growth to slow to 2.0% in 2007, from 3.0% this year. There is even a
risk the economy could slip into recession.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services