Tuesday, May 24, 2005

ALAN GREENSPAN PREDICTS SLOWER GROWTH IN NATIONAL HOUSING PRICES

The Fed chairman argued that while there isn't a national housing bubble,many regional high-priced pockets exist.

The nation's housing market contains "a lot of local bubbles" with "unsustainable" price gains, but significant price declines are unlikely, Federal Reserve Chairman Alan Greenspan said Friday.

Even if housing prices do fall, the drop won't hit most homeowners hard because of the huge amount of equity already in their homes, Greenspan told more than 1,000 onlookers at a meeting of the New York Economic Club.

"There are a number of things which I think suggest, at minimum, that there's a little froth in this market," Greenspan said, to laughs from those thinking that might be an understatement.

The Fed chairman argued that while there isn't a national housing bubble, many regional high-priced pockets exist. "It's pretty clear that it's an unsustainable, underlying pattern," he said.

Read the entire Newsday article

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