Despite some slowing in housing market activity, it is too early for Federal Reserve policy makers to tell whether rising housing prices have been tamed, according to Richmond Federal Reserve Bank president Jeffrey Lacker."At least some potential price-level pressures remain, so it may be too soon to break out the champagne," Mr. Lacker said in a speech to the Risk Management Association. Some economists believe the Fed will continue to raise interest rates until they see house price increases returning to normal levels. Mr. Lacker, who will be a voting member of the Fed's interest-rate-setting committee at its next meeting Jan. 31, noted that the housing data show only a "limited pullback" in housing activity and said it is not unusual to see declines at this time of the year. "Still, mortgage rates are likely to stay somewhat above their recent lows in the coming year, so I would expect housing price appreciation to flatten out next year and aggregate residential investment to stop growing, or perhaps even decline," the FRB president said.

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