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Last Updated: Monday, 21 May 2007, 17:26 GMT 18:26 UK
Housing takes toll on US economy
A house for sale in Virginia
The NABE predicts the housing market will stifle growth this year
The slowdown in the US housing market will hit the country's economy harder than previously thought, according to a group of economic professionals.

The National Association of Business Economists (NABE) has lowered its forecast for economic growth from 2.8% in 2007 to 2.3%.

The downgrade came after official data showed that the economy grew only 1.3% in the first three months of the year.

But the group predicts a rebound in 2008 to gross domestic growth of 3.2%.

The forecast is the average of the predictions from a panel of 48 economists.

The majority of the forecasters put the chances of there being a recession in the next year at above 25%.

Former Federal Reserve chairman Alan Greenspan puts the risk at one in three.

Rising interest rates have slowed the housing market, with particular problems in the sub-prime mortgage market, which lends money to people with poor credit records.


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