Instead of gliding to a smooth landing after years of sky-high growth, the US economy now looks set for a bumpy ride as the property market hits major turbulence.
While most analysts do not yet anticipate a hard landing or even recession, they warn that the world's largest economy is looking a lot shakier than just a few weeks ago.
"'Home for sale' signs have edged out gasoline price billboards as the most important sign of downside risk to the economy," Lehman Brothers economist Ethan Harris said.
Harris predicted that revisions to second-quarter growth data due out this week would show an improvement to 3.0 percent, in line with the Wall Street consensus, from the weak pace of 2.5 percent first given by the government.
But further forward, gross domestic product (GDP) will "slip further below potential" to average 2.5 percent over the next three quarters, the economist said.
The revised GDP reading for the quarter to June is due out on Wednesday, part of a packed week for data releases that should shed greater light on where the US economy is headed.
A consumer confidence report will come out Tuesday, followed by data Thursday on personal incomes, spending and factory orders. The week will climax with the all-important non-farm payrolls report and auto sales for August.
The consensus forecast on Wall Street is for non-farm payrolls to have expanded by 125,000 in August. While up from July's 113,000, that would still be a sub-par pace of job creation.
Reading the runes, the Federal Reserve this month called off a long-running campaign of interest rate hikes to leave its benchmark rate at 5.25 percent.
Minutes from the August 8 meeting will be released Tuesday, and will be closely scrutinised for signs of whether the central bank now intends to stand pat for a while or whether more hikes could be in the offing.
"But basically, the Fed is all but done and that is certainly what the markets are betting on," said Stuart Hoffman, the chief economist at PNC Financial Services.
"By next spring, I think the Fed could reverse course and start cutting rates," he forecast.
In an annual report last month, the International Monetary Fund said the US economy was on course for a "soft landing" but that an overvalued property market, sky-high energy prices and rising inflation could all bode ill.
Some other economists, however, fret that the sharp real-estate slowdown seen in recent reports could throw projections for a smooth transition awry.
Data out last Thursday showed that new US home sales tumbled 4.3 percent in July from June, while the stock of unsold new homes jumped to a record 568,000. The median sales price fell further from a peak of 250,000 dollars in February.
The report came a day after the real estate industry reported sales of existing US homes fell 4.1 percent in July to their lowest point since January 2004.
PNC's Hoffman said "housing clearly is weaker, there's no question about that".
"But a hard landing, call it a recession or negligible economic growth of 1.0 percent or less over two or three quarters, I don't see it."
Other engines of growth such as capital spending, exports and non-residential investment would likely take over from weakening consumer spending, Hoffman said.
But Peter Morici, economist at the University of Maryland School of Business, said the picture is growing more ominous as home prices fall and builders are forced to offer incentives to entice reluctant buyers.
The signs are that the economy is slowing more than the Fed anticipated at its August meeting, he said.
"This begs the questions: Is the economy sailing into just headwinds or a hurricane? Has the Federal Reserve already raised interest rates too much?"