The housing market hasn't bottomed out yet and Pittsburgh -- which to date has been immune from the significant declines in home prices and sales hitting much of the country -- still could experience a downturn.

That's the view of Richard DeKaser, National City Corp.'s chief economist.

"Pittsburgh is going to participate in the weakness," Mr. DeKaser said in an interview prior to talking to the Cleveland-based bank's local clients last night at the O'Reilly Theater, Downtown. "There will be declining volumes in construction and sales and a modest decline in price."

While he does not expect a soft housing market to derail the current economic expansion, Mr. DeKaser believes housing will not rebound until 2007.

The U.S. Commerce Department reported last month that the median price for new homes through September fell to $217,100, from $240,400 a year ago, the largest year-to-year decline since December 1970.

Regional data shows the seven-county Pittsburgh metropolitan area bucking the national trend with an average sales price through September of $139,145, up from $134,594 in the first nine months of 2005.

Because the local market did not experience a huge run-up in prices during the national housing boom, any decline here will be relatively small compared with the rest of the country, Mr. DeKaser said.

He also expects mortgage interest rates to rise but, given that they're hovering around 6 percent for a 30-year, fixed rate loan, "they're still attractive from a historical perspective."

"A year from now, [that rate] will be 7 percent."

Among the reasons the housing slump won't hurt the economy overall, Mr. DeKaser said, are a healthy stock market and a wave of mortgage refinancings that gave consumers cash to pump into other investments.

"I generally think the alarm bells are ringing too loudly," he said.