Bernanke:Housing Market Is Cooling

[Gormy Cuss]

Bernanke: Housing Market Is Cooling
- By JEANNINE AVERSA, AP Economics Writer
Thursday, May 18, 2006

(05-18) 08:56 PDT WASHINGTON (AP) --

The housing market, after flying high for five years, has lost altitude and appears headed for a safe landing, Federal Reserve Chairman Ben Bernanke said Thursday.
...
"Our assessment at this point ... is that this looks to be a very orderly and moderate kind of cooling," Bernanke said.
One of the things that Bernanke and his Fed colleagues are keeping close tabs on is the extent to which a housing cool down will slow overall economic activity.

The housing market has been a top economic performer. The sector has racked up record-high sales five years in a row. Rapid appreciation in house prices has made homeowners feel wealthy and has powered consumer spending, helping the economy move solidly ahead.
...

On the issue of risky home mortgages, Bernanke pointed out that the Fed has issued some guidance for lenders and he underscored the importance of borrowers making sure they understand how interest-only and other nontraditional mortgages work.
"We're not saying you shouldn't make these loans. What we're saying is that they be done the right way," Bernanke told the banking conference.

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Associated Press Writer Michael Tarm contributed to this report from Chicago.

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http://sfgate.com/cgi-bin/article.cgi?file=/news/archive/2006/05/18/financial/f083231D16.DTL
©2006 Associated Press

[ixion]

1. safe landing, huh?

okay, we'll see about that. ;-)

[BlueStateBlue]

2. Soft landing was predicted for the tech bubble, too.

A lot more people have debt tied to this bubble. It's going to be harsh.

[Gormy Cuss]

3. It will be a soft landing for the investors and smart lenders

and a three-storey fall to pavement for the people who could only afford their residences by taking out ARMs and other vehicles where the payments can be adjusted upward.