In the aftermath of Hurricane Katrina, economists and futurists are speculating as to what will happen to housing across the United States. Only a short time ago, "the housing bubble" was the big news, now it's finding homes for millions of refugees. While over 30 states have responded to the crisis with temporary shelters, the long-term outlook is that existing housing will be more precious than before.

Economists at the National Association of Home Builders are already saying that there has never been a catastrophe in the U.S. that has destroyed so much housing at one time and throughout so many locations in three states. They predict that at least 200,000 homes will be beyond repair.

Rebuilding will have to wait while homes and commercial buildings that can be salvaged are prioritized. Not only will a huge number of skilled builders and technicians be required, but so will resources such as lumber and concrete.

And that's going to be a problem. The delivery of building materials will be disrupted by the damage to port facilities. New Orleans was the top destination for imports of cement and other building materials into the U.S. in 2004. Cement imports, in particular, involve the use of specialized terminal facilities. The New Orleans and Mobile customs districts reported about 12 percent of national cement imports in 2004.

This disruption will cause congestion as shipping is diverted to other ports, and it will delay the supply of many building materials to destinations across the U.S., which will increase costs to home builders and buyers in other areas.

That could slow the starts and completions of new homes in some areas, and increase demand for finished homes and existing homes that have been updated.

However, the NAHB also says that typically following a disaster of this magnitude, demand for new homes is not immediate, and rebuilding takes place slowly over a period of years.

But a far bigger threat to homebuilding is the impact of oil and gas prices.

According to the Congressional Budget Office, Hurricane Katrina could cost the U.S. over 400,000 jobs and could take up to one percent off the nation's economic growth. The Gulf Coast was responsible for one-fourth of the oil and gas supplies to the U.S.

The costly effects on consumer goods such as gasoline and groceries will spike, also slowing down the national economy. Economic growth will be barely ahead of inflation.

In addition, caring for victims is costing the federal government as much as $1 billion a day, which will deepen the budget deficit, which will also impact interest rates.

That could cause mortgage interest rates to drift back down again, possibly to historic lows.

While more expensive milk and gas is not good for most people’s pocketbooks, lower interest rates could reignite housing, giving homebuyers another low-hurdle leap at homeownership.

Realty Times editors predict that the storm might have a temporary pullback effect on housing. Consumers may take the opportunity to consolidate, eliminate, or pay down debt, but low interest rates will eventually be too irresistible to ignore.

We believe that new homes and updated existing homes that are move-in ready, located near epicenters and jobs will increase in value.