Economist Richard Felson told BloggingStocks Friday builders continue to do what you'd expect them to do amid an oversupply of homes and sluggish sales -- cut back home construction.

"Home construction is very slow, and that's understandable. We have this glut of inventory stemming from foreclosures, the slowing economy, and tighter lending requirements, and until that's worked-off, home builders will be very cautious," Felson said. "The bottom line for the U.S. economy is that housing will remain a negative contributor to U.S. GDP through at least the first quarter in 2009, and most likely considerably longer. The housing drag continues, unfortunately."

Many economists and analysts expect housing starts to continue to decline well into 2009, as home builders reduce construction, for the aforementioned reasons.

Some analysts also say the housing sector regionally may incur a corrective period as long as 2-3 years -- lasting through perhaps early 2010 -- as markets such as California and Florida compensate for speculative overbuilding during the housing boom.

Housing Sector / Economic Analysis: Bottom line -- the housing sector has gone from bad to worse. Housing will not add anything to GDP growth in Q4 or in Q1 2009, which underscores the need for the United States to find / identify / create a new engine of growth to stimulate the U.S. economy. Otherwise, the recession will deepen -- which is one horrible 'honeymoon present' for the new U.S. President.