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Housing Market to Settle Slowly but Surely: Economists

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The National Association of Realtors reported a 0.3% drop in sales of existing single-family homes and condominiums, though two economists forecast a settling of the housing market.

"We're seeing a settling of the market and, eventually, this inventory excess supply will clear, and we'll see more of a return to normalcy," Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, said on "Morning Call."

In addition to excess supply of homes, Snaith said the housing market is largely driven by demographics, mortgage rates, low unemployment, and personal income.

"There's a lot of housing out there; it's going to take some time to clear," Snaith said. "I've never been one to believe in the bubble description of the housing market."

Allen Sinai, Chief Global Economist at Decision Economics, agrees.

"No bust here, just a depressed, recessed situation for a long time," Sinai said.

Sinai added that "falling home prices and what that might do to the financial exposure of households to consumption," poses a risk to the economy and is being carefully monitored.