Bernanke says US housing prices to stabilize over time

[sabra]

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-08-09T195536Z_01_WBT003676_RTRIDST_0_ECONOMY-BUSH-HOUSING-URGENT.XML


Bernanke says US housing prices to stabilize over time

CRAWFORD, Texas, Aug 9 (Reuters) - A top economic adviser to President George W. Bush said on Tuesday he believes housing prices are likely to stabilize "over a period of time" and that they have shot up because of strong U.S. economic fundamentals.

"I think over a period of time that housing prices are likely to stabilize," said Ben Bernanke, chairman of the White House Council of Economic Advisers. "I don't expect them to keep rising at this rate indefinitely. I don't think anybody really does."

Some U.S. experts have warned that a housing bubble could burst, leaving banks with outstanding loans.

[mom cat]

1. Banks won't be left with the outstanding loans.....the buyers will

unless they declare bankruptcy soon! They may end up losing their McMansion and still be responsible for their balloon payment mortgage.

[Roland99]

2. WTF is he smoking?!?!

The prices are going up because it's the only somewhat sound speculative investment out there. And, interest rates are pretty damn low which means people can ask for more money for their house. Just wait until mortgage rates start heading up to 7-8% again.

[K-W]

3. A pipe full of lies. EOM

[JDPriestly]

4. The bubble is about to burst in LA.

As I drove home from an errand today, I saw an unusual number of open house signs. One of the signs boasted --reduced. That's the second reduced sign I have seen just this week. If that isn't an indication that something is likely to go bang this fall, I don't know what would be.

I figure housing prices will pop soon after the bankruptcy bill goes into effect. Californians will not have to pay off money owed above the market price on their residences by the depression thanks to anti-deficiency legislation (a buyer loses the house but doesn't have to pay the rest of the debt on the loan), but I don't know whether buyers in other parts of the country enjoy that protection. Also, it may put speculators and investors in multi-family housing into a very tight spot even here in California. Round II of the Savings and Loan saga, only this time it will be the mortgage companies and the banks. Remember Round I was on GHWB's watch. No coincidence, I suspect. I have always wondered if the Bush family and friends didn't sneakily clean up on the S&L crisis. The Neil Bush profiteering is infamous, but I've always wondered if it didn't go way beyond that.

[shantipriya]

5. Housing prices!

What a meaningless statement "housing prices will stabilize over time"
.when big guy? 1 yr, 5 yr,10 yr, 25 yr?