Most economic forecasters in a new WSJ.com survey believe recent turmoil in the subprime mortgage market is likely to spread to the broader mortgage market and they expect a widely followed index of home prices to fall this year. But they still think the U.S. will avoid a recession and even a significant rise in unemployment.

“The markets may have over-reacted,” said John Lonski of Moody’s Investors Service. “Only businesses significantly exposed to subprime will be hurt. Mortgage repayment problems aren’t as widespread as we are led to believe. If most people were having trouble paying the mortgage, it would lead to declining consumer confidence and we haven’t seen that.”

Of the 60 economists surveyed, 32 said it is either “very” or “somewhat” likely that the intense and speedy unraveling of the market for subprime mortgages — home loans made to people with poor credit histories will spill over to the rest of the mortgage market.

But 26 said that’s not likely. Two didn’t respond.

The woes of the subprime mortgage market are the latest chapter in deterioration of the housing market. Concerns about the sector and the ripple effects on the economy have been blamed for gyrations in the stock market the past week, including a 2% drop in the Dow Jones Industrial Average Tuesday.

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