Bies: Worst May Be Over for Housing

The housing sector is largely responsible for the slowdown in U.S. economic growth since the spring, but the worst may be over for housing, according to Federal Reserve Board Governor Susan Bies."While much of the downshift in the housing market appears to have occurred already, some further contraction may yet lie ahead," Gov. Bies told students at Drake University in Des Moines, Iowa. However, favorable mortgage rates, income growth, and recent stock market gains "should help to limit any remaining contraction in housing demand," she said. The Fed governor also noted that consumer confidence remains above average and the rest of economy appears to be fine. "This contrasts with previous slowdowns in the housing market, which have typically coincided with widespread economic weakness," she said.