[As reported in the ABI Newsletter, 6/12/2007] Economists are giving up on the idea that the U.S. housing slump will be quick and relatively painless, concluding that the downturn that began nearly two years ago will last at least through the end of 2007 and remain a major drag on the U.S. economy, the Wall Street Journal reported on Saturday. The market started to cool in mid-2005 after a buying frenzy that drove up the average U.S. home price nearly 60 percent in the first half of the decade and more than doubled prices in many areas near the East and West coasts. Late last year, some economists predicted that the market would start bouncing back by the middle of 2007. That hasn’t happened, partly because inventories of unsold houses have continued to grow and a surge in mortgage defaults has made lenders much more reluctant to grant credit to people with spotty payment histories. That means single-family housing starts, which have declined 33 percent since early 2006 to a seasonally adjusted annual rate of about 1.2 million in April, will remain low, around the current level, through the first quarter of 2008 before starting to recover gradually, said David Resler, chief economist at Nomura Securities International Inc. Click here to read the full article. (Registration required.)