Greenspan Says Housing Boom to "Simmer Down," Prices May Fall

[Bush_Eats_Beef]

Greenspan Says Housing Boom to `Simmer Down,' Prices May Fall

Aug. 27 (Bloomberg) -- The U.S. housing boom is sure to end eventually, slowing spending and possibly leading to a drop in home prices, Federal Reserve Chairman Alan Greenspan said.
"
The housing boom will inevitably simmer down," Greenspan said in the text of a speech at the close of a two-day Kansas City Fed symposium in Jackson Hole, Wyoming. "As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease."

Greenspan's comments suggest economic growth would slow as the housing surge subsides, reducing pressure on central bankers to raise interest rates and helping ease imbalances in the world's largest economy. A day earlier Greenspan urged investors not to forget about the possibility that asset prices may fall.

The eventual end of the boom will cause U.S. consumers to take out fewer home-equity loans, giving them less money to spend. That in turn may increase the savings rate and ease the import-driven current account deficit, he said, adding that the shift needn't be ``wrenching'' if the economy remains flexible. ``Home equity extraction will ease and with it some of the strength in personal consumption expenditures,'' Greenspan said.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=avrBAL0A.ACo&refer=home

[katsy]

1. Enlighten me...

``Home equity extraction will ease and with it some of the strength in personal consumption expenditures,'' Greenspan said.


What personal consumption expenditures is he talking about?

[hack89]

5. People are using their houses as ATMs...

taking the equity to support their life styles. When the equity is gone as prices go down, so does the consumer spending. The big question is what will happen to the overall economy when consumer spending is reduced.

[Zenlitened]

2. I honestly do believe Greenspan is a genius.

I mean, he's found a way to make a heck of a good living stating the patently obvious:

"The housing boom will inevitably simmer down," Greenspan said in the text of a speech at the close of a two-day Kansas City Fed symposium in Jackson Hole, Wyoming. "As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease."

No kidding. Really? :dunce:

[DiverDave]

3. Isn't this the same guy

that said the economy could handle all the tax cuts for the uber-rich, then come out saying that "we got it all wrong"??

Yeah, right, I listen to this tool...

[Skink]

4. Why does his news always come out of Jackson Hole Wym?

Is he playing cards with Cheney in an undisclosed location.

[cosmicdot]

6. Kansas City Fed symposium in Jackson Hole

cake anyone?

what's wrong with the Hampton Inn in Kansas City or the Kansas City Marriott Airport?

vacations should be at his own expense

imagine how much money he and others have lavished on themselves over the years

[Yo_Mama_Been_Loggin]

7. Pop goes the bubble

:puffpiece: