Economists see US housing near peak, eye slowdown

Rebuilding after Hurricane Katrina should boost an already hot U.S. housing market, but it will only delay an eventual cooling that could bring a significant slowdown in the rate of home price appreciation and dent consumer spending, economists said on Wednesday.

"The housing market is peaking," said Mark Zandi, economist at Economy.com. "We haven't seen it yet but I do think the market is peaking."

Zandi and other economists at a National Association of Home Builders conference said the five-year run in the housing sector should start to taper off as long-term interest rates rise and homes in the priciest areas become more unaffordable.

Already, affordability is at its lowest since 1991, said David Berson, Fannie Mae's (FNM.N: Quote, Profile, Research) chief economist. In fact, recent data showing weeks of declining mortgage applications could indicate a housing slowdown has begun, Berson said.

"The basic problem is you have huge bubbles, great big bubbles, on the coasts," said David Wyss, chief economist for Standard & Poor's