Worst is Over for Housing

Worst is Over for Housing

Former Federal Reserve Chairman Alan Greenspan said that the worst of the housing adjustment was over, and that he was preparing to publish an analysis of the "serious dispute" over the true effect of mortgage wealth on consumer spending.

Housing starts and other data indicated the dampening effect that a slow housing market had on gross domestic product was at its maximum in the third quarter, when growth slowed to a weaker-than-expected 1.6 percent annual rate, he said at an investor conference organized by investment bank Friedman, Billings, Ramsey Group Inc.

Greenspan said he expected inventory levels to come down at a "reasonably rapid pace" and that "it looks as though sales figures have stabilized." But he also said there would be actual price declines in housing. "That will have some impact on consumer expenditures," he said. "We haven't seen it yet."

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