That's what forecasters are telling the WSJ in one of the paper's periodic surveys. Slightly more than half of the 60 economists surveyed said that it was either "very" or "somewhat" likely that the subprime mess will spill over to the rest of the mortgage market, but there's not much concern about things getting ugly. First quarter forecasts have been lowered, though the group still expects growth to increase to 3 percent by year end (that's pretty good for so late in the expansion). They put the odds of a recession in the next 12 months at about 25 percent. And here's another upbeat morsal: By a 4-1 margin, they believe that the worst of the housing bust is behind us. That's encouraging, but just remember that the housing market tends to vary block by block, so blanket generalizations on what's happening in L.A. compared with, say, Topeka, are pretty meaningless. From the WSJ:

The extent of any spillover from subprime to the broader housing market remains unclear. "You can tell a lot of scary stories," said Richard DeKaser of National City Corp., "but they're not broadly accurate. We're still talking about a small segment of the nation's homes that are affected." According to the American Housing Survey for 2005, the most recent date for which data are available, 33% of all homes are owned outright and 57% have traditional mortgages, leaving just 10% potentially affected by ARM woes.