Housing Sector Stabilizing?

Here's the economic outlook according to Simon Kwan of the San Francisco Fed. The bottom line is that:

There is little evidence that the ongoing weakness in the housing sector is spilling over to the broader economy, and there are some tentative signs that the housing sector may be stabilizing. Furthermore, there appears to be a fair amount of strength in both consumer spending and labor market developments. Thus, the current economic slowdown seems like a well-timed opportunity to bring the somewhat elevated inflation down to a more acceptable level.

Based on all available information, real GDP growth during the current quarter is likely to be at just under 2 percent at an annual rate. As the drag on the economy due to housing gradually disappears, economic growth is expected to pick up slowly in 2007, but seems likely to remain at a below-trend rate of about 2.5 percent.