The chief economist for Standard & Poor's told the nation's leading homebuilders Oct. 19 that there are "big local" housing bubbles in such high-priced markets as California, Florida, and New York.S&P economist David A. Wyss said a typical home in San Diego costs 9.6 times the area's average household income, compared with a national affordability ratio of 3.2 times. He said in the New York metropolitan area a home costs 8.6 times the average household income. Ten years ago the national average was just 2.6 times household income. Even though Mr. Wyss described these markets as "bubbles," he said home prices could fall gradually in these areas. He also said housing bubbles exist in several foreign industrialized nations, including the United Kingdom. Mr. Wyss and NAHB chief economist David Seiders predicted that mortgage rates will continue to rise and will top out at 7% over the next two years.

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