Is the economic glass half empty or half full?

Talk to different groups of forecasters and you get different answers, but basically a similar consensus: The national recession is likely to drag on for another four to six months, but by mid-year we should be moving into a slow-growth rebound mode, digging out of recession.

A new poll of 50 top business economists conducted by Blue Chip Economic Indicators, a research organization, found a mildly upbeat general outlook -- especially if the economic stimulus package being prepared by the incoming Obama administration and the new Congress cuts taxes, stimulates housing sales, lowers mortgage rates, and reverses job losses as the year moves on.

Randell Moore, the head of Blue Chip Indicators, which conducts monthly economic surveys, said "the consensus (is that) we are in the deepest part of the recession (right) now. But the stimulus package and lower gasoline prices are expected to … restore consumer confidence and personal spending -- and that will put us on the road back."

The Federal Reserve released its own forecast, based on discussions at its December board meeting: Expect negative growth through the late Spring, a slow recovery thereafter.

What about housing and real estate?

The latest pending home sales survey by the National Association of Realtors, covering the month of November, was down. But think back to the prevailing mindset back in October and November - some of the biggest jitters and panic on Wall Street in recent history, plus worries about the financial safety of the banking system.

Who would expect people to rush out and sign home purchase contracts with the entire economy in earthquake mode and consumer confidence plummeting?

Today, by contrast, the outlook is VERY different. We're on the verge of getting an economic shot in the arm from a giant stimulus package -- some of which will likely directly target home sales, possibly with tax credits.

Mortgage interest rates are at almost unprecedented lows -- five percent and even below if you've got a downpayment and decent credit. Applications for new mortgages to buy houses were up by more than 7 percent last week, according to the Mortgage Bankers Association's national survey -- up 2.3 percent for those seeking conventional loans and up an amazing 19.2 percent for buyers planning to use FHA financing.

As the saying goes: Follow the money. There's something important stirring out there. Home prices are at 2004 levels in many markets. Buyers who can qualify are seeing real, tangible opportunities….and that dynamic, along with help from the stimulus package, should begin turning around housing even before the economy as a whole.

Published: January 13, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.