Greenspan: Worst May Be Past in U.S. Housing

25 10 2006

Former Federal Reserve Chairman Alan Greenspan said the U.S. housing market appears to be emerging from its recent travails and the “worst may well be over.”

“I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out,” Greenspan said at an event in Calgary, Canada, sponsored by BMO Financial Group, according to a transcript BMO made available.

“There is a good chance of coming out of this in good shape, but average housing prices are likely to be down this year relative to 2005. I don’t know, but I think the worst of this may well be over,” he added.

Applications for U.S. home mortgages jumped in the latest week bolstered by increases in refinancing and new home purchases as long-term rates decreased, according to data from the Mortgage Bond Association.

Greenspan, the former Fed chief’s comments suggest a more sanguine view of the U.S. housing market than that offered by current Fed chairman Ben Bernanke, who said last week that the housing market was currently undergoing a “substantial correction.”

Since Greenspan, 80, retired from the Fed upon the expiration of his term in January, he has been giving paid talks to audiences around the world and writing a book to be released next year. He was appointed Fed chairman in 1987 by then- president Ronald Reagan.

Source: Reuter


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