US housing industry economists on Monday cautioned that rapid house price gains in some areas of the country may not be sustainable.
"There is an increasing risk of price declines in some of those areas, especially those in which job growth has been the most anemic," said David Berson, chief economist at mortgage finance provider Fannie Mae.
Berson spoke on a conference call organised by the Homeownership Alliance about the outlook for the housing industry.
Economists forecast a strong second half of 2004 for the industry - in spite of rising mortgage interest rates - as the US economy gains strength.
"Corporate profits are up 40 percent from two years ago, so companies are spending and jobs are being created," said David Lereah, chief economist for the National Association of Realtors. "In the housing markets this is largely neutralising the effects of modestly higher interest rates."
At the same time, the economists said activity is likely to moderate with higher interest rates.
Home building is likely to recede from a strong second quarter pace, but the overall year should set record highs for single family starts and new home sales, said David Seiders, chief economist of the National Association of Homebuilders.
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