The risk of huge defaults on subprime mortgages and heavy debts combined is a bigger threat to US economic prosperity than terrorism, according to a panel of US business economists.
The conclusion was based on a survey of 258 National Association for Business Economics (NABE) members conducted between July 24th and August 14th.
Only 20 per cent of members said terrorism was now their top concern, compared with 35 per cent in a March survey.
"Meanwhile, 18 per cent of those surveyed pointed to the effects of the subprime debacle as their biggest concern, and the related issue of 'excessive household and/or corporate debt' was cited by another 14 per cent," NABE said.
For all the concern about current conditions in mortgage markets, NABE members remained upbeat about the longer-term outlook for the housing sector.
While 42 per cent thought housing prices will be flat over five years, another 41 per cent predicted they will rise compared with only 16 per cent who foresaw a price drop.