Rising mortgage interest rates are natural at this stage of the economic cycle, and the impact on homeowners with adjustable-rate mortgages -- including interest-only and payment-option ARMs -- should be "relatively small," according to Treasury Secretary John Snow.Only 5% of all mortgage debt will reset over the next 12 months, and total annual payments will increase by about $10 billion, or 0.1% of annual private consumption, the secretary told a National Association of Home Builders board of directors meeting. "I don't think [resets] are going to have a big effect," the Treasury secretary said. Mr. Snow also told the builders that housing activity will moderate but remain strong. "There is an awful lot of overdone talk about a housing bubble and a collapse of the housing industry," he declared. "It is not likely to happen. In fact, I think it is a remote possibility."

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