News Article From: 06-08-2006
The first article, Cooldown expected; economist differ over degree, from the Arizona Republic, reports that Arizona's economy is expected to cool down during the rest of the year and next, according to Arizona economists. However they disagree as tho the level of the slowdown. University of Arizona's Eller College of Management said Wednesday that the state's economy will experience a major slowdown in the second half of 2006 as inflation pressure mount, interest rates rise and the housing market cools. But Tracy Clark, editor of the Arizona Blue Chip Economic Outlook is more optimistic, saying that the state's economy has "fired on all cylinders" in 2006, buoyed by a 13.5 percent increase in construction jobs. "Our panelists on the forecast aren't convinced the end has come yet," Clark said. "Even with the housing slowdown we still have quite a bit of population growth. As long as that continues, construction is going to stay at a reasonably high level, although at a noticeably lower level than we've been having."
The second article, Industry cuts forecast for home sales, from MSNBC, reports that the National Association of Realtors lowered its forecast for U.S. home sales this year and called on the Federal Reserve to stop raising interest rates because parts of the housing market are "vulnerable". Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability," said David Lereah, the groups chief economist. The NAR is predicting a 6.8 percent decrease in existing home sales for 2006, and a 6.2 percent decrease in new home starts. The article points out that while the housing market is expected to keep fading from its record levels, 2006 is still expected by many economists to be the third best year for housing ever.