Fed Awaited 'Reliable' Home Data at Last Vote

Federal Reserve officials were still waiting to see "reliable" data on house prices when they voted to pause and keep the target federal funds rate unchanged at a Federal Open Market Committee meeting in early August."Reliable, comprehensive data were not yet available on recent house price movements, but the rate of appreciation appeared to be moderating and was likely to slow further in coming months," according to the minutes of the Aug. 8 FOMC meeting. In late July, the National Association of Realtors reported that the sale prices of existing single-family homes increased by only a 1.1% annual rate in June -- down dramatically from a 14.5% annual rate in June 2005. The FOMC minutes show that Fed Chairman Ben Bernanke and other FOMC members recognized that residential investment "contracted" in the second quarter and the housing market "continued to cool." However, they said it is still uncertain how much the slowdown in housing would "restrain" consumer spending. The Office of Federal Housing Enterprise Oversight is scheduled to release its Housing Price Index for the second quarter on Sept. 5. The Fed can be found online at http://www.federalreserve.gov.