Everybody agrees that the housing market is drifting down from record highs. But is it coming in for a soft landing, or is it about to crash?

That’s what economists debated at the National Association of Home Builders’ spring construction forecast conference, held on Thursday in Washington, D.C. Attended by building-product manufacturers, builders and others involved in the housing industry, the semiannual event covered the likely trajectory of housing prices, starts and sales over the next year or two.

Although most of the economists on the panels have close ties to the industry, none was projecting a continuation of the five-year housing boom, which peaked last July. Nearly all described the housing market as “in transition,” although they couldn’t agree on how much favorable factors like strong overall job growth, low unemployment and moderate inflation will be able to mitigate the drag of rising mortgage interest rates, lack of housing affordability and wage stagnation.

Even the most optimistic panelists were guarded in their expectations for the coming two years. NAHB Chief Economist Dave Seiders predicted the rate of home-price appreciation would slow to 4% by the end of 2006, only a third of last year’s pace. In the first quarter of 2007, he expects new and existing single-family home sales to fall 5.8% to a total of 6.59 million units and single-family starts to drop 13.4% to 1.15 million units. “It will be a general cooling process, not a thud,” he says.

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